Pakistan’s government has formally requested a $1.75 billion loan from commercial banks at higher interest rates as part of its efforts to meet the conditions set by the International Monetary Fund (IMF) for loan approval.

Finance Ministry sources revealed that officials are in talks with three major banks to secure the loan, with the possibility of long-term financing at an interest rate of around 5%.

Sources from the Finance Ministry noted that the government is pursuing loans from multiple commercial banks to ensure a stable financial position and fulfill IMF’s requirements. These loans come with relatively higher interest rates, but they are essential to maintain the country’s liquidity.

Also Read: Final date for approval of IMF loan can't be given yet: Aurangzeb

In addition to the commercial bank loans, Pakistan is also in discussions with Saudi Arabia for an oil loan facility. However, the deal has reportedly stalled, and negotiations are ongoing, sources said. The stalled oil facility has raised concerns as it was expected to ease the country’s growing energy import expenses.

Efforts to secure commodity and commercial loans are also underway, with Pakistan applying for loans from the International Islamic Trade Finance Corporation (ITFC), Islamic Development Bank (IDB), and Standard Chartered Bank.

In a separate development, Pakistan made a formal request to Standard Chartered Bank to restructure its commercial loans, ranging from $800 million to $1 billion.

Also Read: Govt fails to get $7bn loan approval deadline from IMF

Meanwhile, Finance Minister Muhammad Aurangzeb expressed optimism about the progress of ongoing talks with the International Monetary Fund (IMF) regarding external financing.

In an informal conversation with journalists on Thursday, the minister stated that discussions for the approval of the IMF loan program are at an advanced stage and will soon be finalized. "Talks with the IMF on external financing will be finalized soon," he remarked.

Aurangzeb emphasized that the approval process of the loan programme from the IMF Executive Board is progressing smoothly.

"We are at an advanced stage for approval from the Executive Board, and it will come soon. The final date for the approval cannot be given yet," he maintained, but assured that the loan program is expected to be approved by the end of this month.

The minister also highlighted ongoing negotiations with Saudi Arabia for an oil loan facility, allowing deferred payments. He noted that mutual investment opportunities in various projects are also being explored with the Kingdom.

In addition to talks with friendly countries, Aurangzeb confirmed that the government is engaging with commercial organizations to secure further financing options.