Pakistan’s Finance Minister Hopeful for May’s IMF Deal

Finance Minister Muhammad Aurangzeb is optimistic about Pakistan’s ability to finalize a crucial loan agreement with the International Monetary Fund (IMF) in the coming month. Aurangzeb shared his positive outlook while engaging with global media outlets during his visit to Washington for the annual meetings of the IMF and the World Bank.

In discussions with wire services, Pakistan’s Finance Minister indicated that the current government is seeking an extended loan from the IMF to ensure macroeconomic stability and implement necessary structural reforms. He noted that an IMF mission is anticipated to visit Islamabad around mid-May. Additionally, Pakistan intends to request additional financing from the Fund under the Resilience and Sustainability Trust once the IMF loan is secured.

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Aurangzeb also highlighted Pakistan’s aspirations to enhance its sovereign rating in the upcoming fiscal year and revealed ongoing dialogues with rating agencies to prepare for re-entry into international debt markets.

With Pakistan’s existing $3 billion arrangement with the IMF set to expire in late April, the government aims to secure a larger loan to bolster stability and reforms. During the IMF and World Bank Spring Meetings, Aurangzeb held discussions with the IMF’s Managing Director on these matters.

While the exact size of the loan program remains unspecified, Pakistan is anticipated to seek at least $6 billion. The country has made strides in accumulating foreign exchange reserves, aiming to reach $10 billion by the end of June, equivalent to roughly two months of import cover. Additionally, efforts are underway to improve the debt situation, including rolling over bilateral debts, such as those with China.

During his visit to the US, Aurangzeb also met with his Chinese counterpart in Washington to convey condolences for a recent terrorist attack and reaffirm Pakistan’s commitment to the safety of Chinese citizens. The discussions underscored bilateral cooperation in economic stability efforts and emphasized the enduring bond between the two nations. Pakistan is focused on reform agendas to fortify its economy, with plans for the repayment of Chinese loans expected after the commencement of the second phase of the China-Pakistan Economic Corridor (CPEC). Furthermore, Pakistan expressed interest in launching a Panda Bond in the fiscal year 2025-26.