Pakistan aims to secure a B+ sovereign credit rating by the next fiscal year as its economic position improves, Finance Minister Muhammad Aurangzeb told Bloomberg TV.
The country has received three credit rating upgrades since last year. Moody’s Ratings raised Pakistan’s rating to B3 from Caa1 in August, while S&P Global Ratings upgraded it to B from B- in July, citing improvements in economic conditions and financial stability.
Pakistan came close to default in 2022 before receiving support from the International Monetary Fund (IMF). Its foreign exchange reserves have since climbed to a record high, and the country has returned to international debt markets with a $3 billion Eurobond issuance, its first in four years.
Aurangzeb said the government was not in a hurry to issue bonds during the current fiscal year but was working to diversify its financing sources.
The government has appointed banks to arrange future Islamic sukuk offerings and is exploring rupee-denominated bonds settled in US dollars. It also plans to invite bids soon for the remaining portion of its panda bond programme and is considering tokenising existing Eurobonds.
Pakistan intends to replace some short-term external debt with longer-term borrowing over the next two to three years. The strategy aims to reduce refinancing risks while keeping total external debt, currently close to $100 billion, broadly unchanged.
The finance minister also said Pakistan was holding active discussions with the United States over a proposed $10 billion facility designed to provide liquidity support. He said the arrangement was not intended to be a conventional loan or credit line, while negotiations on trade tariffs were nearing their final stage.
Separately, the two countries are discussing potential US-backed investments in agriculture, minerals and mining through the US Export-Import Bank and the International Development Finance Corporation.
Aurangzeb said US investors had also expressed interest in Pakistan’s refinery sector. He added that the government expected to secure approval for its new automobile policy within weeks.
