Pakistan has opted not to secure a loan from a commercial bank at an interest rate of 11%.

The finance ministry has resolved against borrowing from a commercial bank at an 11% interest rate. Prime Minister Shehbaz Sharif allegedly instructed the finance minister to refrain from acquiring costly loans.

Despite having reached an accord with commercial banks for a loan at an interest rate of 11%, the government has now opted not to accept the cash. In the event of a finance shortfall, loans will be pursued from alternative sources offering cheaper interest rates, according to informed sources.

They additionally state that Pakistan may obtain loans totalling up to $700 million from the International Trade Finance Corporation and the Islamic Development Bank (IDB).

Furthermore, an additional $1 billion is anticipated from the IMF in the current fiscal year, with an extra $2 billion projected for the subsequent year.

The IMF is anticipated to allocate an additional $2 billion to Pakistan by fiscal year 2027, with the concluding $1 billion tranche due in the 37th month of the program. The inaugural economic assessment under the Extended Fund Facility is scheduled for March.

This action by the government may contravene the commercial bank loan agreement, thereby complicating subsequent loan applications.

Since joining the International Monetary Fund (IMF) in 1950, Pakistan has participated in 25 IMF programs. The latest scheme is a 37-month Extended Fund Facility (EFF) sanctioned in September 2024.