Pakistan is targeting 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 secured three credit rating upgrades since last year. Moody’s Ratings upgraded Pakistan to B3 from Caa1 in August, while S&P Global Ratings raised its rating to B from B- in July after improvements in economic conditions and the country’s financial position.
Pakistan narrowly avoided default in 2022 with support from the International Monetary Fund (IMF). Its foreign exchange reserves have since reached a record high, following a $3 billion Eurobond issuance, the country’s first in four years.
Aurangzeb said Pakistan was in no rush to issue bonds this fiscal year but was diversifying its borrowing options. The government has appointed banks for future Islamic sukuk offerings and is exploring dollar-settled bonds denominated in rupees. It also plans to seek bids soon for the remaining portion of its panda bond programme and is considering tokenising existing Eurobonds.
The government aims to replace some short-term external debt with longer-term borrowing over the next two to three years, reducing rollover risks while keeping overall external debt, currently close to $100 billion, broadly stable.
Aurangzeb also said Pakistan was in active talks with the US over a proposed $10 billion facility to provide liquidity support, rather than a conventional loan or credit line, as trade tariff discussions approach their final phase.
The two countries are separately discussing potential US-backed investment in agriculture, minerals and mining through the US Export-Import Bank and the International Development Finance Corporation.
Aurangzeb added that US investors were interested in Pakistan’s refinery sector, while the country’s new automobile policy was expected to be approved within weeks.
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