Pakistan’s Finance Minister Muhammad Aurangzeb told Reuters that the country aims to finalize the terms of a new International Monetary Fund (IMF) loan in May. The country has initiated discussions with rating agencies to prepare for reentry into international debt markets.
With the current $3 billion IMF agreement concluding in late April, Pakistan is pursuing a larger and extended loan. According to the minister, this effort is intended to secure macroeconomic stability and support crucial structural reforms.
Aurangzeb mentioned, “We expect the IMF mission in Islamabad around mid-May when we anticipate outlining these loan details.” Although he did not specify the desired loan amount, expectations suggest Pakistan will request at least $6 billion.
Following an agreement on the IMF loan, Pakistan plans to seek additional funds from the Fund’s Resilience and Sustainability Trust. Recently, the nation has bolstered its foreign exchange reserves, projecting to reach $10 billion by the end of June, sufficient for roughly two months of imports.
Regarding debt, Aurangzeb noted an optimistic outlook, stating, “Most of our bilateral debt, including from China, is being rolled over. We face no significant repayment challenges this or next fiscal year, even though we need to repay about $25 billion annually.”
Pakistan is also preparing to re-enter international capital markets, potentially through a green bond, though further groundwork is required. “We need to achieve a certain ratings standard,” he explained, revealing ongoing negotiations with rating agencies to improve Pakistan’s sovereign rating next fiscal year.
Aurangzeb anticipates any issuance in international capital markets might occur in the fiscal years 2025/2026.
