Finance Minister Muhammad Aurangzeb has confirmed the country is actively exploring multiple new debt instruments to replace a $3.5 billion UAE facility due for repayment this month.
The government is weighing Eurobonds, Islamic sukuk, and dollar-settled rupee-linked bonds as options, with Aurangzeb saying Eurobond issuance is expected to occur before the end of this year.
He confirmed that Saudi Arabia was among countries being considered for a possible replacement loan, adding that all borrowing options remained under active government review and consideration.
Foreign reserves currently stand at approximately 2.8 months of import cover, a level the minister described as critical to maintaining the broader macroeconomic stability.
IMF is expected to approve the latest lending tranche by late April or early May, which would release just under $1.3 billion through the Extended Fund Facility and Resilience and Sustainability Facility.
Pakistan also plans to launch its first-ever Panda bond next month, a $250 million yuan-denominated instrument backed by the Asian Development Bank and the Asian Infrastructure Investment Bank.
The Panda bond forms part of a planned $1 billion programme and represents a significant step in the broader effort to diversify its international borrowing sources and reduce dependence on dollar debt.
GDP growth is forecast at close to four percent this fiscal year, while remittances are projected to reach $41.5 billion, helping the country absorb economic pressures from the ongoing Middle East conflict.
The war in the Middle East has caused fuel price spikes that have prompted Pakistan to reconsider its energy security strategy, including building strategic petroleum and LPG reserves beyond standard commercial holdings.
Aurangzeb stated that the supply shock from the conflict had reinforced the urgency of accelerating Pakistan’s transition toward renewable energy sources as a long-term structural priority for the economy.
Pakistan has also taken on a diplomatic role in the conflict, acting as a mediator between the United States and Iran, raising its international profile amid significant regional geopolitical and economic pressures.
The minister said no formal request had yet been made to amend the country’s $7 billion IMF programme, though adjustments remain a possible option depending on how regional conditions develop in coming weeks.
