Islamabad: Pakistan has agreed to terms for a USD 1 billion loan with two Middle Eastern banks, with an interest rate between 6% and 7%, as Finance Minister Muhammad Aurangzeb confirmed to Reuters during the World Economic Forum in Davos. The news has been sourced from an article on January 22.
According to the details, the agreement includes one bilateral loan and one trade finance loan. Both loans are short-term, lasting up to one year. Pakistan’s central bank had previously aimed to raise up to USD 4 billion from Middle Eastern commercial banks by the next fiscal year.
Aurangzeb also discussed the country’s plan to engage with rating agencies to work towards a single B rating, with hopes for an upgrade in the coming months. He noted that Pakistan is optimistic about achieving progress before the fiscal year ends in June. Despite recent upgrades by Moody’s to ‘Caa2’ in August and Fitch to CCC+ in July, Pakistan’s ratings remain in the sub-investment grade category.
Pakistan is focused on strengthening its financial position after securing a USD 7 billion bailout from the International Monetary Fund (IMF) in September 2024. The first formal review of the Economic Facility Framework (EFF) will take place in late February 2025. Aurangzeb expressed confidence in meeting the review requirements.
Additionally, Pakistan has requested around USD 1 billion in funding from the IMF’s Resilience and Sustainability Trust (RST) to support climate-related initiatives. The IMF is expected to discuss this request further during the upcoming EFF review.
As a graduate in English Literature, Zohaib believes that words are not just a mere figment of imagination. It takes wisdom to be good at them. Following this reason, he is pursuing his career as Public Relations and Content Specialist at Zameen.com.
