International Monetary Fund (IMF)

Current Context : Recently, the IMF Executive Board completed the first review of Pakistan’s 37-month Extended Fund Facility (EFF) and approved an immediate $1 billion disbursement, despite India’s formal objection over terrorism financing risks.

About the IMF & EFF

• IMF Overview: Established 1944 at Bretton Woods to ensure monetary cooperation and financial stability; 190 members; governed by a Board of Governors and a 24-member Executive Board headquartered in Washington, D.C.

Membership and Voting Power

• The IMF has 190 member countries.
• Each member contributes a quota, based on its economic size and performance, which determines its voting power and access to funding.
• Voting is determined by a formula: 1 vote per 100,000 SDRs of quota + basic votes.
• SDRs (Special Drawing Rights) are an IMF-created international reserve asset, not a currency, but can be exchanged among members for freely usable currencies.
• EFF Arrangement: A 37-month program approved Sept 2024, totalling $7 billion to stabilize Pakistan’s economy via fiscal consolidation, SOE reforms, and reserve rebuilding.
• Controversy: India abstained and protested, citing potential misuse of funds for cross-border terrorism.