Pakistan is working to secure around $4 billion in loans from Middle Eastern banks to meet its financial needs for the upcoming fiscal year, following a delay in IMF approval for a crucial $7 billion loan package.
Finance Minister Muhammad Aurangzeb, along with other senior officials, has been actively engaging with key representatives from Dubai Islamic Bank and Mashreq Bank. These discussions have focused on economic prospects and investment opportunities in Pakistan. The government is eager to attract more investment and reassure foreign lenders of its commitment to economic stability and reform.
Earlier, the government had received a high-interest loan offer from a European bank, but it was deemed too costly without IMF backing. The IMF’s delay in approving the loan package has been attributed to Pakistan’s struggle to secure additional financing and rollover deposits from Saudi Arabia, China, and the UAE.
Despite these challenges, Pakistan’s foreign exchange reserves have improved to $9.3 billion, thanks to central bank interventions. Dubai Islamic Bank has shown interest in providing syndicated financing, which could be influenced by the IMF’s support.
Finance Minister Aurangzeb is hopeful that the IMF will approve the loan package by September. In the meantime, Pakistan has ambitious plans for foreign borrowing, including securing $20 billion for the fiscal year, with significant contributions expected from the UAE and international bonds.
In conversations with Dr. Adnan Chilwan of Dubai Islamic Bank, the Finance Minister highlighted Pakistan’s economic progress and reforms, including tax expansion and privatization efforts. Dr. Chilwan expressed Dubai Islamic Bank’s interest in supporting Pakistan’s growth, particularly in areas like Islamic banking and infrastructure.
The Finance Minister remains hopeful that Pakistan’s credit rating may improve soon, despite current challenges. He is confident that with continued engagement and reform, Pakistan will navigate these financial hurdles and attract the investment needed for economic stability.
