ISLAMABAD: The government of Pakistan is actively working to secure $5 billion in external commercial financing for the fiscal year 2025-26.
Breakdown of the Financing Plan
The proposed financing strategy includes:
- $2.64 billion in short-term loans from international commercial banks, with an expected interest rate of 7–8% annually. These loans are to be acquired without stringent conditions or performance-related targets.
- $2.27 billion in long-term commercial borrowing, also through foreign banking institutions.
The government intends to engage four major international commercial banks to meet its financing goals.
Key Bank Contributions
According to sources:
- $1.1 billion is expected from the Industrial and Commercial Bank of China (ICBC)
- $500 million each is planned from Standard Chartered Bank and Dubai Islamic Bank
- A $500 million loan is expected to be backed by a commercial guarantee from the Asian Development Bank (ADB)
These efforts are part of a broader external financing strategy to ensure fiscal stability.
IMF Reserve Target
In line with conditions set by the International Monetary Fund (IMF), Pakistan is aiming to raise its foreign exchange reserves to $13.9 billion by June 30.
The State Bank of Pakistan’s net reserves target of $14 billion would ensure coverage of approximately three months’ worth of imports, bolstering economic resilience amid ongoing financial reforms.
This external borrowing plan plays a crucial role in Pakistan’s strategy to meet IMF benchmarks and maintain macroeconomic stability in the upcoming fiscal year.
