Pakistan is moving to secure a $600 million external loan facility as it prepares for the upcoming review of its economic program by the International Monetary Fund (IMF), amid mounting external financing pressures and a significant debt repayment due in April 2026.
Sources familiar with the matter told ProPakistani that discussions are ongoing between the Ministry of Finance and a consortium of international banks led by Standard Chartered, with participation from Chinese lenders. The negotiations are focused on finalizing the structure and pricing of the facility, with the expected interest rate exceeding 7 percent. The financing arrangement is being pursued as part of broader efforts to manage short-term liquidity requirements and maintain stability in the country’s external accounts.
According to officials, the proceeds from the proposed loan are likely to be directed toward commodity-related payments. This step is aimed at easing pressure on foreign exchange reserves at a time when Pakistan faces a major external repayment obligation. The country is scheduled to repay $1.2 billion in Eurobonds in April 2026, a payment that has heightened attention on reserve adequacy and external debt management strategies.
The timing of the financing discussions is significant, as an IMF mission is set to visit Pakistan from February 25 to March 11 for the third review of the country’s ongoing program. Preparations for the review are already underway, with ministries directed to submit detailed implementation reports covering policy commitments and reform progress. The outcome of the review will be closely watched by markets and international partners, as it is expected to influence the pace and scale of future inflows.
Sources indicated that a successful review could unlock more than $1 billion in additional IMF funding. In addition, Pakistan may gain access to approximately $200 million under the Resilience and Sustainability Facility, further strengthening its external financing buffer. These potential inflows are seen as critical to sustaining macroeconomic stabilization efforts and reinforcing confidence among investors and bilateral partners.
The country’s economic team has also briefed Prime Minister Shehbaz Sharif on ongoing engagements with international lenders and the broader economic outlook. Discussions have centered on managing near-term external liabilities, strengthening reserve coverage, and ensuring continued alignment with IMF program benchmarks. The leadership is reportedly monitoring developments closely, given the importance of maintaining fiscal discipline and meeting reform commitments under the program framework.
Pakistan’s external position has remained under scrutiny over the past year, with policymakers balancing debt repayments, import requirements, and exchange rate stability. Securing bridge financing ahead of large bond maturities is a common strategy to mitigate rollover risk and smooth cash flow management. However, borrowing at interest rates above 7 percent underscores the cost implications associated with accessing international capital during periods of constrained liquidity.
As the April Eurobond maturity approaches and the IMF review timeline draws near, the outcome of negotiations with the banking consortium and the Fund will play a decisive role in shaping Pakistan’s near-term financial trajectory. The government’s approach reflects a combination of market-based borrowing, multilateral engagement, and policy oversight aimed at stabilizing the external account and safeguarding macroeconomic continuity.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.