Pakistan has agreed terms for a $1 billion loan with two Middle Eastern banks at a 6%-7% interest rate, Finance Minister Muhammad Aurangzeb told Reuters on Tuesday, as the country looks for more financing.
“With two institutions we have now gone forward in signing up the term sheet — one bilateral and one for trade [finance],” Aurangzeb said during an interview on the sidelines of the World Economic Forum annual meeting in Davos.
The loans were short-term — or up to one year, Aurangzeb added.
The finance minister is in Davos to attend the WEF Annual Meeting between January 20 and 25. Global leaders will address key global and regional challenges at the Annual Meeting 2025.
The meeting will focus responding to geopolitical shocks, fostering growth to improve living standards, and stewarding a fair and inclusive energy transition.
Pakistan aims to boost its finances after securing a $7 billion International Monetary Fund (IMF) bailout in September 2024, with the first review set for late February.
“We have the first formal review of the EFF coming through towards (the) end of February,” Aurangzeb said. “I do think we are in good stead for that review.”
IMF Extended Fund Facilities (EFFs) provide financial assistance to countries facing serious medium-term balance of payments problems resulting from structural weaknesses that require time to address.
This is a developing story and is being updated with further details.
