The Asian Development Bank (ADB) has postponed a critical $800 million financing package for Pakistan following a request from India, pushing the board meeting from May 28 to June 3. Under ADB regulations, any board member can request a one-time delay, which India exercised, as reported by Express Tribune.

This delay comes after India's unsuccessful attempt to halt a $1 billion tranche from the International Monetary Fund (IMF) for Pakistan.

The financing package consists of a $300 million policy loan and a $500 million guarantee, which would help Pakistan secure up to $1.5 billion in foreign commercial loans. The $500 million guarantee is essential due to Pakistan’s B- credit rating, despite a recent upgrade by Fitch.

Despite the postponement, Pakistan’s external financing plans remain intact, with the government aiming to raise over $1 billion in commercial loans backed by the ADB guarantee. The country has allocated $3.8 billion in foreign commercial loans for FY24, although actual disbursements have been limited due to credit constraints. The ADB's guarantee, while not designated for development projects, serves as a support mechanism for reserves.