Pakistan has secured a $1 billion loan from two Middle Eastern banks, Finance Minister Muhammad Aurangzeb announced on Tuesday during an interview at the World Economic Forum (WEF) annual meeting in Davos. The loan, with an interest rate of 6%-7%, is short-term, with a maturity period of up to one year.
Aurangzeb clarified that the loan agreement involves two financial institutions—one providing bilateral financing and the other offering trade finance. This funding is part of Pakistan’s broader efforts to stabilize its economy, following a $7 billion bailout package from the International Monetary Fund (IMF) secured in September 2024.
Aurangzeb expressed optimism about Pakistan’s financial prospects, noting that the first formal review of the IMF’s Extended Fund Facility (EFF) is scheduled for late February. “We are in good stead for that review,” he said.
The IMF’s EFF program is designed to assist countries facing serious balance of payments challenges due to structural weaknesses, requiring sustained reform efforts. The $1 billion loan from the Middle Eastern banks represents a crucial step in Pakistan’s ongoing economic recovery efforts.
