Pakistani Finance Minister Muhammad Aurangzeb said that his country requested China to increase its existing currency swap agreement by 10 billion yuan, about $1.4 billion, and expects Islamabad to issue Panda bonds before the end of the year.
Aurangzeb told Reuters in an interview on the sidelines of the IMF and World Bank spring meetings in Washington that Pakistan already has a currency swap agreement worth 30 billion yuan.
"From our perspective, reaching 40 billion yuan would be a serious point to move towards... so we have just made that request," he said.
The People's Bank of China is promoting currency swap agreements with a number of emerging economies, including Argentina and Sri Lanka.
Pakistan has made progress in issuing its first Panda bond, a yuan-denominated debt bond issued in the Chinese domestic market.
The Pakistani minister said that talks with the heads of the Asian Infrastructure Investment Bank and the Asian Development Bank, the two lenders willing to provide credit enhancements for the issuance, were constructive.
He added, "We want to diversify our borrowing base, and we have made good progress in this regard. We hope to be able to issue our first bonds this year."
At the same time, Aurangzeb expected the IMF Executive Board to approve a staff-level agreement on a new $1.3 billion loan under a climate resilience program in early May, in addition to approving the first review of the ongoing $7 billion bailout program.
The IMF Board's approval would allow for the disbursement of a $1 billion tranche under the program, which Pakistan initiated with the Fund in 2024 and has played a key role in stabilizing the Pakistani economy.
When asked about the economic repercussions of the tension with India following the killing of 26 people at a tourist site earlier this month, the minister said that the tension "will not be helpful."
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