Written by Soumya Bhowmick

On April 22, a strike by Pakistan-linked terrorists in Pahalgam killed 26 tourists, sparking one of India’s most intense military retaliations in decades under Operation Sindoor. As missile exchanges and drone strikes escalated across the border, a high-stakes diplomatic intervention unfolded, and an unlikely peacemaker stepped in: US President Donald. Trump announced a ceasefire on May 10, declaring it a triumph of statesmanship.

However, the International Monetary Fund (IMF), just a day earlier, had approved a $2.4 billion bailout to Pakistan, split between a $1 billion Extended Fund Facility and a $1.4 billion climate-linked Resilience and Sustainability Trust (RST). For Islamabad, it was an economic lifeline; for New Delhi, a case of rewarding belligerence. The sequence — from terror attack to conflict, ceasefire, and cash infusion — suggests that the IMF played more than a financial role, becoming an unlikely but strategic lever in managing a near-war between nuclear rivals.

Old habits die hard

The United States, as the IMF’s largest shareholder with veto power, was likely central to this manoeuvre, offering financial leverage to secure Pakistan’s de-escalation. While the IMF and Pakistani officials maintain that the loan terms were negotiated before the conflict, the final approval during peak hostilities........

© Indian Express