Pakistan has reached an agreement to secure a $600 million short-term loan from Standard Chartered Bank, London, to stabilize its fluctuating foreign exchange reserves. This move comes as the government faces a significant gap in its external financing targets, having received only $5.7 billion of the planned $26 billion for the current fiscal year. The loan carries an interest rate of approximately 6.3 percent and is set for a tenure of six to nine months.
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The primary purpose of this facility is to fund the import of essential energy supplies, including crude oil and gas. This borrowing is seen as a strategic temporary measure while the government waits for larger inflows from commercial loans and international bonds, which have faced delays. Despite some improvements in economic indicators, the country recently repaid a $700 million loan to the China Development Bank, which briefly pressured official reserves.
To strengthen foreign exchange reserves and stabilize the external account, #Pakistan is finalizing a $600 million short-term loan with Standard Chartered Bank (#London).
Tenure: 6 to 9 months.
Purpose: Primarily funding crude oil and gas imports.
Context: This bridge… pic.twitter.com/3MEZyb7aSc
— Developing Pakistan (@developingpak) February 19, 2026
As of mid-February 2026, total liquid foreign exchange reserves stand at approximately $21.3 billion, with the State Bank of Pakistan aiming to reach $18 billion in official reserves by June. The government is also working to launch its first “Panda bonds” in the Chinese market to further diversify its funding sources. This loan highlights Pakistan’s ongoing reliance on commercial borrowing to manage its external account while navigating the requirements of the IMF’s reform program.
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