Pakistan is considering multiple financing options, including Eurobonds, commercial borrowing, and loans from other countries, to replace a $3.5 billion facility from the United Arab Emirates. Finance Minister Muhammad Aurangzeb said all funding avenues remain open as the country manages external pressure on its foreign reserves. The move comes as Pakistan balances debt repayments and IMF programme targets.
Aurangzeb told Reuters that Pakistan will return the $3.5 billion UAE loan this month, which could put pressure on reserve levels. He said the government is closely monitoring macroeconomic stability and maintaining import cover of around 2.8 months. He added that debt obligations remain manageable despite external shocks.
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The finance minister said Pakistan is exploring Eurobonds, Islamic sukuk, and dollar-settled rupee-linked bonds to strengthen financing options. He also said the country expects to issue Eurobonds this year while exploring additional commercial borrowing. Pakistan is also preparing its first-ever Panda bond worth $250 million backed by international financial institutions.
Aurangzeb said Pakistan has not yet requested changes to its $7 billion IMF programme but may consider it depending on future conditions. He added that the IMF board is expected to approve the next tranche of funding soon, unlocking about $1.3 billion. The government remains focused on maintaining external stability and meeting reform commitments.
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The minister also highlighted the impact of global conflict on energy markets, saying Pakistan should build strategic petroleum reserves and accelerate renewable energy transition. He said supply shocks underline the need for long-term energy security planning. Pakistan expects growth, remittances, and social support measures to help absorb external pressures in the current fiscal year.