$10 Billion US Facility Is Not a Loan, Says Finance Minister

Finance Minister Muhammad Aurangzeb said the proposed $10 billion US backup facility would not be a loan or credit line, but rather a mechanism designed to strengthen currency and exchange-rate stability and help Pakistan access international capital markets.

 

Aurangzeb said Pakistan expects a response from the US Treasury by the end of September regarding its request through the Exchange Stabilisation Fund. The government is also engaging with the US EXIM Bank and Development Finance Corporation as part of efforts to secure market-based financing.

 

The finance minister said Pakistan wants to reduce its reliance on short-term bilateral borrowing and replace it with longer-term market financing, which would also reduce the need for frequent debt rollovers.

 

Pakistan currently has around $12.3 billion in short-term debt owed to Saudi Arabia, China and Kuwait. Saudi Arabia has rolled over $5 billion until December 2028, while China continues to roll over around $4 billion annually.

 

Aurangzeb said the government has appointed three banking consortiums to arrange Eurobonds, Sukuk and dollar-settled rupee bonds, with plans to target five-, seven- and 10-year maturities.

 

Separately, the government launched a simplified tax scheme for small traders, allowing eligible retailers to pay 1% of annual sales or a minimum Rs25,000 per year, with simplified filing and exemptions from certain tax compliance requirements.