KARACHI: In response to increasing external debt repayment demands, the Pakistani government has secured a $300 million short-term loan from United Bank Ltd (UBL).
A press release issued on Monday confirmed that UBL facilitated the loan through its branches in the UAE and Bahrain. While the government seeks additional financing for debt servicing this fiscal year, it faces challenges in refinancing loans from China and other nations.
UBL, one of Pakistan’s largest banks with international assets exceeding $2.4 billion, highlighted that the loan deal reflects its ability to offer reliable solutions both domestically and globally. The bank has a strong history of handling complex, high-value transactions.
Despite positive trends in remittances and exports, Pakistan needs at least $14 billion to cover external debt payments in 2024-25, with the State Bank aiming for reserves of $13 billion by the end of FY25. However, the SBP reported a decrease of $228 million in its reserves, which stood at $11.853 billion for the week ending December 26.
The SBP has been purchasing dollars from the local market to maintain reserves in line with IMF conditions for the $7 billion Extended Fund Facility. UBL confirmed that the loan aligns with Pakistan’s external financing needs and IMF commitments.
In other news, HBL Microfinance Bank (HBL MfB) and HBL Zarai Services Ltd (HZSL) have announced a strategic partnership to empower farmers by improving access to financial and agricultural support services. This collaboration aims to support sustainable agriculture and enhance rural livelihoods. Through this partnership, HBL MfB will offer microfinance products tailored to the needs of smallholder farmers at HBL Zarai’s Deras.
