Pakistan seeks $2bn in commercial loans to bridge financing gap

Pakistan is trying to secure around $2 billion in commercial loans to bridge its current account gap. This move is a prerequisite for the approval of a $7 billion International Monetary Fund (IMF) loan program, as Pakistan faces a financing gap of approximately $2.5 billion.

The government is in talks with three different entities, including the Islamic Trade Finance Corporation (ITFC), the Islamic Development Bank (IDB), and Standard Chartered Bank (SCB).

Reportedly, Pakistan has already requested a commercial loan of between $800 million and $1 billion from the SCB.

Despite reaching a staff-level agreement with the IMF on July 12, Pakistan has yet to be included in the IMF Executive Board’s calendar up to September 13.

Filling this crucial financing gap is essential for securing approval for the IMF program.

Prior to this, Pakistan had asked China and the United Arab Emirates to rollover loans totaling $12 billion for three years.