ISLAMABAD: In a setback for Pakistan, a global money-laundering watchdog has placed the country on its terrorist financing watchlist, as per reports. The decision is likely to impact Pakistan's economy and its already strained relations with the United States.


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The move comes days after reports that Pakistan had been given a three-month reprieve before being placed on the list. It seems to be a part of a broader US strategy to pressure Pakistan to cut alleged links to Islamist terrorists waging chaos in neighbouring Afghanistan.


US has spent the past week lobbying member countries of the Financial Action Task Force (FATF) to place Pakistan on the so-called "grey list" of nations that are not doing enough to combat terrorism financing. An official statement was expected later on Friday.


This is not the first time that Pakistan is featuring on the list. It was previously on the list for three years until 2015. Earlier this week China, Turkey, and the Gulf Cooperation Council (GCC) had been opposing the US-led move against Pakistan but both China and the GCC reportedly dropped their opposition by Thursday night. 


Pakistani officials and analysts fear that being on the FATF watchlist could endanger its handful of remaining banking links to the outside world, causing real financial pain to the economy just as a general election looms in the summer. Under FATF rules one country's opposition is not enough to prevent a motion from being successful. Britain, France and Germany backed the US move.


Islamabad has sought to head off the move by amending its anti-terrorism laws and by taking over organizations controlled by Hafiz Saeed, a Pakistan-based Islamist whom Washington blames for the 2008 Mumbai attacks that killed 166 people. 


On Tuesday, Foreign Minister Khawaja Asif tweeted that Pakistan had received a 3-month reprieve, adding that it was "grateful to friends who helped".


(With Reuters inputs)