Pakistan Wants More US Financing and Less Chinese Debt

Pakistan is seeking increased financial support from the United States while simultaneously aiming to reduce its reliance on debt from China, according to Finance Minister Muhammad Aurangzeb. The government plans to re-enter international capital markets, signaling confidence to private investors through a proposed $10 billion swap line with Washington.

Aurangzeb mentioned that the US Export-Import Bank and the US International Development Finance Corporation could play a crucial role in supporting investments and trade. The finance minister expressed that Pakistan is seeking to transition from an aid-dependent economy to one driven by trade and investment, with a focus on export-led growth instead of consumption-driven expansion.

Pakistan is currently planning to issue Eurobonds, Islamic sukuk, and rupee-denominated, dollar-settled bonds, with potential amounts ranging from $1 billion to $2 billion in Eurobonds during the current fiscal year. Additionally, the government is considering $750 million in Yuan-denominated panda bonds. Aurangzeb clarified that the US partnership is not mutually exclusive with China, but confirmed that Pakistan is not seeking additional Chinese financing at present.

The finance minister also mentioned that Pakistan aims to achieve a B plus rating within a year, with the long-term goal of reaching a double B category.