Pakistan requests $1bn in IMF climate cash, sees reserves rising

Finance Minister Muhammad Aurangzeb announced that Pakistan has formally requested around $1 billion in funding from the International Monetary Fund to help mitigate climate risks for low and middle income countries. The IMF has already provided a $7 billion bailout to Pakistan and has additional funding available through its Resilience and Sustainability Trust. Pakistan, one of the most vulnerable countries to climate change, suffered from devastating floods in 2022 due to global warming. The country is also in talks with the Asian Infrastructure Investment Bank for a credit enhancement for a planned Panda bond issuance, aiming to diversify its funding sources. Pakistan’s foreign exchange reserves are expected to reach $13 billion by March, which could help improve its credit rating and attract commercial loans. Despite recent upgrades by Moody’s and Fitch, Pakistan’s ratings remain sub-investment grade.