Finance Minister Muhammad Aurangzeb aims to finalize the parameters of a new loan agreement with the IMF by May, as revealed in a statement to Reuters.
Exploring International Debt Markets
Pakistan has initiated discussions with ratings agencies to facilitate its return to the international debt markets, according to media reports.
Transition from Stand-By Arrangement
With the current $3-billion Stand-By Arrangement (SBA) set to expire in late April, Pakistan seeks a larger and more enduring financial support to reinforce macroeconomic stability and implement structural reforms.
Upcoming IMF Mission Visit
Aurangzeb anticipates an IMF mission to visit Islamabad around mid-May, marking the initial stages of shaping the new loan agreement. He recently met with IMF Managing Director Kristalina Georgieva during the Spring Meetings.
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Loan Size and Further Assistance
While the exact size of the loan is undisclosed, Pakistan aims for a program of at least $6 billion. Additionally, the nation plans to seek further financial assistance through the Resilience and Sustainability Trust once the IMF loan is finalized.
Foreign Exchange Reserves and Debt Management
Despite economic challenges, Pakistan has bolstered its foreign exchange reserves, expected to reach $10 billion by June, providing around two months’ worth of import cover. Efforts to roll over bilateral debts, including those with China, have been successful.
Return to International Capital Markets
Pakistan eyes a return to the international capital markets, potentially through the issuance of a green bond. Talks with ratings agencies have begun to improve the sovereign rating before pursuing such initiatives.
Future Issuance Plans
Any international capital markets issuance is likely to occur in the 2025/2026 fiscal year, Aurangzeb indicated, emphasizing the importance of achieving a favorable ratings environment.
