Pakistan has secured a $1 billion loan from two Middle Eastern banks, Finance Minister Muhammad Aurangzeb announced during an interview with Reuters at the World Economic Forum’s (WEF) annual meeting in Davos. The loan carries an interest rate of 6%-7%.
Aurangzeb revealed that the agreement involves two institutions: one offering bilateral financing and the other providing trade finance. Both loans are short-term, with a maturity of up to one year.
This funding aims to strengthen Pakistan’s finances following the $7 billion bailout package secured from the International Monetary Fund (IMF) in September 2024. The first review of the IMF Extended Fund Facility (EFF) is scheduled for late February.
Expressing optimism, Aurangzeb stated, “We have the first formal review of the EFF coming through towards the end of February… I do think we are in good stead for that review.”
The IMF’s EFF program offers financial assistance to countries facing medium-term balance of payments issues due to structural weaknesses that require sustained corrective efforts.
The $1 billion loan from Middle Eastern banks marks a significant step in Pakistan’s efforts to stabilize its economy.
