ISLAMABAD: In a significant development following the conclusion of its latest IMF programme, Pakistan has successfully re-entered the international commercial debt market by securing a $1 billion syndicated loan facility for a five-year term.
This marks Pakistan’s return to foreign commercial borrowing, with the deal signaling growing confidence among international lenders. The government is also finalizing arrangements to refinance an additional $1.3 billion in loans from Chinese banks, pushing expected external inflows to $2.3 billion by June 30, 2025.
With these fresh borrowings, Pakistan’s foreign exchange reserves, currently standing at $11.6 billion as of June 6, are projected to rise to nearly $14 billion in the coming weeks, according to government officials.
Landmark Facility with ADB Guarantee
The Ministry of Finance confirmed the $1 billion syndicated term finance facility on Wednesday, highlighting that it was partially guaranteed by a $500 million policy-based guarantee from the Asian Development Bank (ADB). The loan is tied to reforms under ADB’s “Improved Resource Mobilization & Utilization Reform Program.”
The ADB guarantee played a pivotal role in helping Pakistan negotiate favorable terms under the Secured Overnight Financing Rate (SOFR), making the deal more cost-effective for the government.
Officials described the agreement as a landmark transaction that underscores strong regional support, especially from Middle Eastern financial institutions. It also marks the beginning of a new financing partnership between Pakistan and key lenders in the Gulf region.
Strengthening Economic Stability
The government views this move as a critical step in bolstering its foreign exchange reserves, ensuring greater external sector stability, and maintaining investor confidence amid ongoing economic reforms.
The inflows are expected to support the balance of payments and help meet Pakistan’s external obligations, while also paving the way for broader financial cooperation with regional and international institutions.
