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Pakistan is considering Eurobonds, loans from other countries and commercial debt to replace a $3.5 billion facility<\/a> from the United Arab Emirates (UAE) and manage its foreign reserves, Finance Minister Muhammad Aurangzeb said.<\/p>\n Aurangzeb also told Reuters<\/em> the shock from the ongoing<\/a> war in the Middle East meant that Pakistan must consider a strategic petroleum reserve and a faster switch to renewable energy.<\/p>\n \u201cAll options are on the table,\u201d Aurangzeb said when asked if the government was in talks with Saudi Arabia for a loan that could replace the UAE facility.<\/p>\n Pakistan will reportedly return<\/a> a $3.5bn loan to the UAE this month, putting pressure on its reserves and risking breaches of its International Monetary Fund (IMF) programme targets.<\/p>\n The country has been thrust into the international spotlight as it plays the role of a mediator<\/a> between the United States and Iran to end the war in the Middle East.<\/p>\n Aurangzeb, speaking on the sidelines of the IMF\/World Bank annual spring meetings<\/a>, said the country could manage all debt repayments, and that its reserves remained at roughly 2.8 months of import cover.<\/p>\n Maintaining at least that level, he said, would be \u201can important aspect of our overall macro stability as we go forward\u201d.<\/p>\n \u201cWe are looking at Eurobond, we are looking at Islamic sukuk<\/em>, we are looking at dollar-settled rupee-linked bonds,\u201d Aurangzeb said, adding that they expected to issue Eurobonds this year and are also exploring commercial loans.<\/p>\n Aurangzeb said while the country had not yet requested any additions or changes to its $7bn<\/a> IMF lending programme due to the economic shocks of the war in the Middle East, it was a potential option.<\/p>\n \u201cDepending upon how things pan out over the next few weeks, that\u2019s something which can be discussed,\u201d he said.<\/p>\n The Fund\u2019s board is likely to sign off on the latest lending tranche by the end of this month or early next month, Aurangzeb said, which would unlock just under $1.3bn via the Extended Fund Facility<\/a> (EFF) and the Resilience and Sustainability Facility<\/a> (RSF).<\/p>\n Pakistan also expects to launch its first-ever Panda bond<\/a> \u2014 debt denominated in Chinese yuan \u2014 next month, he said. The $250m issue, the first of a planned $1bn programme, will be backed by the Asian Development Bank and the Asian Infrastructure Investment Bank.<\/p>\n Aurangzeb said the country\u2019s expected GDP growth of close to 4pc, remittances<\/a> of around $41.5 billion and targeted assistance to the poorest citizens could withstand the Iran war shock for this fiscal year, which ends on June 30.<\/p>\n But the price spikes meant the country should focus on establishing strategic reserves of fuels and LPG \u2014 rather than simply relying on commercial reserves \u2014 and accelerate its move towards renewable energy.<\/p>\n \u201cWhen you go through a supply shock like this\u2026 it sends a very clear view that we need to accelerate these journeys,\u201d he said.<\/p>\n <\/div>\n<\/figure>\n <\/div>\n<\/figure>\n