Pakistan Wants More US Financing and Less Chinese Debt

Pakistan is seeking greater US financing and preparing to return to international capital markets as the administration looks to reduce its reliance on bilateral debt from China, Finance Minister Muhammad Aurangzeb informed the Financial Times.

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• He remarked the administration additionally sees an notable role for the US Export-Import Bank and the US International Development Finance Corporation in supporting investment and trade.
• Pakistan has reduced its fiscal deficit, brought down inflation and rebuilt its foreign exchange reserves under a $7 billion, three-year IMF program approved in 2024.
• Aurangzeb remarked Pakistan's engagement with the US was not an either-or choice with China, but confirmed that Islamabad was not seeking further Chinese financing at present.

Aurangzeb remarked a proposed $10 billion swap line with Washington was intended to serve as a confidence signal for private investors as Pakistan seeks to attract more international financing. He remarked the administration additionally sees an notable role for the US Export-Import Bank and the US International Development Finance Corporation in supporting investment and trade. Govt Picks Faster Route For LESCO And MEPCO Privatization.

In practice, the finance minister remarked Pakistan had received constructive engagement from Washington on the proposed swap line and anticipated an answer within the next couple of months. He remarked the administration was seeking to shift the economy from dependence on aid toward trade and investment.

Pakistan has reduced its fiscal deficit, brought down inflation and rebuilt its foreign exchange reserves under a $7 billion, three-year IMF program approved in 2024. Nevertheless, economic expansion remains subdued, with the administration estimating GDP expansion at 3.7 percent for fiscal year 2025 to 26. While exports declined, the country's trade deficit additionally widened to $39.5 billion in the year concluded June.

Aurangzeb remarked the administration was therefore focused on export-led expansion rather than consumption-driven expansion. It he remarked could rapidly create pressure on Pakistan's external account as of the country's reliance on imports.

As part of its planned return to international borrowing, Pakistan has appointed banking consortiums to arrange Eurobonds, Islamic sukuk and rupee-denominated, dollar-settled bonds. Aurangzeb remarked the administration was considering issuing between $1 billion and $2 billion in Eurobonds during the current fiscal year, depending on market pricing and maturity. Pakistan additionally aims to seek $750 million through Yuan-denominated panda bonds.

Meanwhile, the finance minister remarked US institutions could additionally backing specific investments in Pakistan, including financing Boeing aircraft for the lately privatized Pakistan International Airlines and helping US firms upgrade the country's oil refineries.

He continued that the administration was working toward a B plus rating over the next 12 months, with a longer-term goal of reaching the double B category. Stay Connected with ProPakistani.

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