Pakistan agrees $1bn loan with two Middle Eastern banks: FinMin Aurangzeb

Islamabad web desk..Pakistan has agreed terms for a $1 billion loan with two Middle Eastern banks at a 6%-7% interest rate, Finance Minister Muhammad Aurangzeb told Reuters on Tuesday, as the country looks for more financing.
“With two institutions we have now gone forward in signing up the term sheet — one bilateral and one for trade [finance],” Aurangzeb said during an interview on the sidelines of the World Economic Forum annual meeting in Davos.
The loans were short-term — or up to one year, Aurangzeb added.
The finance minister is in Davos to attend the WEF Annual Meeting between January 20 and 25. Global leaders will address key global and regional challenges at the Annual Meeting 2025.
The meeting will focus responding to geopolitical shocks, fostering growth to improve living standards, and stewarding a fair and inclusive energy transition.
Pakistan aims to boost its finances after securing a $7 billion International Monetary Fund (IMF) bailout in September 2024, with the first review set for late February.
“We have the first formal review of the EFF coming through towards (the) end of February,” Aurangzeb said. “I do think we are in good stead for that review.”
IMF Extended Fund Facilities (EFFs) provide financial assistance to countries facing serious medium-term balance of payments problems resulting from structural weaknesses that require time to address.
Aurangzeb invites global stakeholders
In an exclusive article published as part of the World Economic Forum (WEF) annual meeting, Finance Minister Aurangzeb invited the global stakeholders “to support Pakistan’s journey by investing in priority sectors such as agriculture, Information Technology (IT), renewable energy and pharmaceutical Sectors”.
The minister highlighted the transformative journey embarked upon by Pakistan in recent years towards economic stabilisation and growth, state-run APP reported on Tuesday.
“Confronted with formidable challenges, we implemented decisive reforms to build a robust foundation for sustainable and inclusive development. Today, the results of these efforts are becoming evident, with the economy demonstrating resilience and renewed potential,” he says.
Question on the series of economic reforms, he said: “I assumed office as finance minister in 2024, Pakistan faced severe fiscal and monetary pressures and inflation had surged to 38%, straining households and eroding purchasing power.”