Pakistan seeks $4 billion in loans from Middle Eastern banks amid IMF deal

WEB DESK: Pakistan is actively engaging with Middle Eastern banks to secure approximately $4 billion in loans to meet its external financial needs for the current fiscal year.

This effort is part of a larger $7 billion Extended Fund Facility (EFF) awaiting approval from the International Monetary Fund (IMF).

Finance Minister Muhammad Aurangzeb, along with his team, has been in discussions with prominent banks, including Dubai Islamic Bank and Mashreq Bank, to explore investment opportunities in Pakistan.

During a virtual meeting with Dr Adnan Chilwan, Group CEO of Dubai Islamic Bank, the finance minister provided a comprehensive overview of Pakistan’s economic progress.

He highlighted key initiatives, such as expanding the tax base, enhancing the ease of doing business, and ongoing reforms in state-owned enterprises (SOEs). Dr Chilwan reaffirmed Dubai Islamic Bank’s interest in Pakistan, recognising it as a strategically important market. He expressed the bank’s commitment to furthering financial growth, particularly in Islamic banking and SME development.

In a similar interaction, Mashreq Bank’s President Ahmed Abdelaal praised Pakistan’s policies aimed at improving investor confidence and fostering a business-friendly environment. He expressed the bank’s interest in expanding its engagement in Pakistan’s financial sector, particularly in infrastructure, energy, technology, and agriculture.

The discussions underscored the importance of deepening economic cooperation between Pakistan and the UAE, with both banks showing a strong commitment to supporting Pakistan’s economic development.

Pakistan has targeted around $20 billion in foreign borrowing for the fiscal year, with expectations of increasing reserves to $19-20 billion. The government remains focused on creating a stable macroeconomic environment to attract and facilitate foreign investment.

Earlier, Aurangzeb revealed that the IMF Executive Board is expected to approve a new programme for Pakistan in September 2024, following ongoing discussions that are progressing positively.

This update was shared during a Senate Standing Committee on Finance meeting, chaired by Salim Mandviwalla. Previously, Aurangzeb had suggested that the IMF would approve the Extended Fund Facility (EFF) for Pakistan by the end of August 2024, but the approval is now anticipated for September.

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