Finance
Pak may borrow $23 bn in next fiscal year to finance development plans
These nations and international creditors are now dictating their terms due to their unending dependency on them | Photo: Shutterstock
Pakistan has planned to borrow a minimum of $23 billion in the next fiscal year, including the rollover of a bilateral debt of $12 billion, to finance its development plans and meet its external financing requirement which will keep the cash-strapped country’s foreign and economic policies dependent on global financial institutions like the IMF, according to a media report on Thursday.
Budget documents for fiscal year 2024-25 showed that Pakistan would borrow at least $23.2 billion, or Rs 5.9 trillion, which did not include any loan from the International Monetary Fund (IMF), The Express Tribune newspaper reported, adding that the International Monetary Fund’s loan will be for balance of payments support.
Out of the $23 billion, the government has included $20 billion in budget documents. It has not made the rollover of $3 billion by the United Arab Emirates (UAE) part of federal books as it is also meant for balance of payments support.
Details showed that Pakistan would take $19 billion in loans for budget financing and building its foreign exchange reserves. The amount appears colossal, which will keep the country’s foreign and economic policies dependent on the IMF, the World Bank, Saudi Arabia, China, the UAE and the Islamic Development Bank.
These nations and international creditors are now dictating their terms due to their unending dependency on them.
Prime Minister Shehbaz Sharif has claimed that he has received investment pledges of $15 billion from Saudi Arabia and the UAE but so far these promises have not translated into concrete agreements.
After being unable to acquire new debt from foreign commercial banks, the government has once again budgeted $3.9 billion worth of foreign commercial loans in the new fiscal year. However, in the outgoing year, China rolled over $1 billion of commercial debt.
There was hope that the international credit rating agencies would improve Pakistan’s junk rating under the $3 billion IMF’s standby arrangement. However, political and economic vulnerabilities prevented them from improving Pakistan’s standing.
Finance Minister Muhammad Aurangzeb said on Tuesday that the rating agencies were waiting for approval of the new Extended Fund Facility of the IMF. In case of further delay in the improvement of the ratings, the government’s plan of raising $4.9 billion through Eurobond and foreign commercial loans would not materialise.
The government had estimated the receipt of $6 billion from sovereign bonds and foreign commercial loans in the current fiscal year. After such deals could not be clinched, the State Bank of Pakistan bought an equal amount from the Pakistani markets.
The government has once again included the rollover of $5 billion in cash deposits from Saudi Arabia. This shows that the country will not be able to return the money out of which $3 billion had been taken in 2019 for just one year.
However, Saudi Arabia has not agreed to extend the oil facility of $1 billion to the next fiscal year, prompting the government to exclude it from the projection of external loan receipts. Similarly, the government has not included any new loan from Saudi Arabia for the import of petrol.
China’s $4 billion in cash deposit has again been added to the rollover queue, of which $2 billion is maturing next month.
The UAE’s financing has not been added to the federal borrowing plan since the money has been given for the balance of payments support, which will be serviced by the central bank from its profits. Out of the $3 billion, $1 billion is maturing next month.
The government has also estimated a new loan of $500 million from the Islamic Development Bank and $465 million on account of Naya Pakistan Certificates. Around $1.1 billion will be borrowed to finance the federal Public Sector Development Programme, according to the paper.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Jun 13 2024 | 2:19 PM IST
The UK’s financial regulator should consider expanding its oversight to cover advanced artificial intelligence models used in financial services, according to a review commissioned by the Financial Conduct Authority (FCA), as policymakers assess whether existing rules can keep pace with rapidly evolving AI technology.
The Monetary Authority of Singapore (MAS), the city state’s central bank and financial regulator, has joined forces with major financial institutions and FinTechs to release a white paper aimed at keeping AI agents in finance operating within safe limits.
The paper, called Safeguards for Agentic Finance at Runtime (SAFR), lays out an industry-built framework designed to let AI agents perform financial tasks in a manner that is safe, secure and dependable. It has been produced under BuildFin.ai, the MAS programme that backs the responsible creation and rollout of AI tools across the financial sector.
The push comes as AI agents take on more autonomous work at a pace that makes hands-on human oversight impractical. In response, firms require real-time controls that keep agent behaviour inside the mandates, policies and risk limits they have defined. SAFR answers this with a series of governance checkpoints that check and log each action an agent proposes before that task is carried out.
The framework extends the AI Risk Management toolkit created through MAS’ Project Mindforge, concentrating on how protections can be put into practice at the moment an agent acts. The white paper maps out how measures such as policy bound execution, real time validation, auditability and interoperability can be woven into system operations, giving institutions the confidence to deploy agents consistently.
Industry participants have already tested SAFR in several settings. These include agent-assisted payments and treasury work, where agents handle routine transactions inside set mandates to cut friction and lift efficiency; wealth management and advisory processes, where agents examine documents and produce structured assessments within tightly defined task limits to speed up compliance reviews; and client engagement, where agents create insights and draft materials within approved content boundaries so staff can serve clients more productively.
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Talking about finances can be stressful, but it’s even more stressful if you’re not sure what advice is good and what advice might put you in a worse position than you started in.
Recently, a Reddit user who goes by market_vision1 asked, “What is the worst financial advice people still repeat?” I took out a little pen and paper while I was reading through these, like, “Lemme write that down. And that. Oh! And that, too!” I’m curious what you think, though. Are all of these things we should avoid financially?
1. “One of the more damaging ideas out there is ‘Oh, you’re young, don’t worry about money, just go have fun and worry about it when you are older.’ Of course, the number one regret I hear from clients nearing retirement is that they wish they had just started saving when they were younger.”
—u/hems86
2. “The ‘tax bracket’ myth should be illegal. My uncle turned down a $10K raise because he thought he’d ‘lose money.’ He literally paid $10,000 to avoid $2,200 in taxes. That’s not a tax strategy. That’s a $7,800 donation to the Dumba— Fund, and he’s the chair.”
—u/Serious_Cress5040
Related: “31 Things Only Super Wealthy People Can Buy That You Probably Don’t Even Know Exist”
3. “People living outside of their means and not realizing it. They say things like, ‘You deserve X, don’t settle for less.’ Most of the people I see who are broke are not 100% victims of the system. The majority of people waste their money on dumb stuff that they can’t afford. They’ll tell me they’ve cut out all unnecessary spending, but when I look at their actual expenses, I see otherwise. Spending $800 a month on DoorDash, financing a new car with a $900 monthly payment, going on international vacations, spending 70% of their income on rent in a fancier apartment when there are options for cheaper living.”
—u/hems86
4. “I’m a financial planner, and some of the worst advice I’ve ever heard is ‘Don’t pay off your credit cards in full. Carrying a balance on your credit card builds your credit; paying it off every month hurts your score.’ People say this to me all the time when I ask why they carry a balance on their card with 25% interest when they have more than enough to pay it off.”
—u/hems86
5. “It’s not so much advice as it is a financial choice. I know people who are taking out 96-month loans on cars they never should’ve considered in the first place, just because they can make the car note when it’s stretched over eight years. They never considered the interest on the loan plus the rate cars depreciate and are befuddled when they can’t afford to trade it in.”
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