Pakistan plans Panda Bond return after IMF loan approval

Pakistan is poised to re-enter the global financial markets to procure expensive ‘commercial borrowing,’ which includes the launch of Panda bonds in the Chinese market, following the anticipated approval of the next International Monetary Fund (IMF) loan programme in the forthcoming fiscal year commencing on July 1, 2024. During the launch of the Economic Survey 2023-24 in Islamabad on Tuesday, Finance Minister Muhammad Aurangzeb remarked, “commercial bank borrowing is making a comeback. I have already had initial meetings while returning from the United Arab Emirates (UAE).” Moody’s Ratings, last week, stated that the cost of commercial borrowing may reach 10%, affecting countries in emerging markets like Pakistan, attributing this trend to tight monetary policies causing an increase in borrowing costs in recent years.