[Text/Observer Network Xiong Chaoyi] Local time on April 26, Muhammad Aurangzeb, Pakistan's Minister of Finance, during his participation in the spring meetings of the International Monetary Fund (IMF) and the World Bank (World Bank) in Washington, D.C., USA, accepted an interview with Reuters and said that Pakistan had requested China to increase the existing currency swap quota by 1 billion yuan RMB, and expected that Pakistan would issue Panda Bonds before the end of this year.
"From our perspective, reaching a currency swap quota of 400 billion yuan will be a very good goal... We have just made this request," he said, adding that Pakistan's current currency swap quota has already reached 300 billion yuan RMB.
Pakistan's Finance Minister Muhammad Aurangzeb Bloomberg
Reuters reported that, apart from Pakistan, in recent years, the People's Bank of China has also signed currency swap agreements with many emerging economies such as Argentina and Sri Lanka.
The report mentioned that progress has been made in issuing the first Panda Bond. A Panda Bond refers to a Renminbi-denominated bond issued by offshore institutions in China's domestic bond market.
Aurangzeb stated that constructive talks have been held with the presidents of the Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB), both of which will provide credit enhancement support for the issuance of these bonds.
"We want to diversify our loan base, and we have made some good progress in this regard. We hope to initially print and issue this year."
Meanwhile, Aurangzeb expects that the IMF Executive Board will approve two agreements in early May: one is a staff-level agreement for a new financing arrangement of $1.3 billion based on a climate resilience loan program, and the other is the first review of the current $7 billion bailout program.
If approved by the IMF Board, Pakistan will receive $1 billion under this plan. Pakistan received this bailout fund in 2024 and played a key role in stabilizing the country's economy.
Reuters also mentioned that the recent terrorist attack in Indian-controlled Kashmir has completely "ignited" a new round of disputes between India and Pakistan. When asked about the impact of this tense relationship on the economy, Aurangzeb said, "This will not help." He predicted that Pakistan's economic growth rate would reach about 3% by the end of the current fiscal year in June, rise to 4%-5% next year, and aim for a 6% growth target thereafter.
Local time on April 24, Indian soldiers strengthened patrols after a shooting incident in Srinagar, the capital of Indian-controlled Kashmir. IC Photo
On April 22, suspected militants opened fire on tourists in the Indian-controlled Kashmir region, resulting in at least 26 deaths and dozens of injuries. Pahalgam town, where the incident occurred, is a popular tourist destination. This event became the most severe terrorist attack in the region since the Pulwama attack in 2019, sparking concerns about a renewed military confrontation between India and Pakistan.
On April 23, India accused Pakistan of "supporting cross-border terrorism" and announced a series of tough measures against Pakistan, including closing borders, halting water supply, and expelling diplomats. In response, Pakistan made a same-day statement saying it would "retaliate" and announced the immediate closure of airspace to India, suspension of all trade with India, and expulsion of India's defense, navy, and air force advisors stationed in Pakistan.
Agence France-Presse reported that local time on April 27, Indian officials said that continuous clashes between Pakistani and Indian forces in the Kashmir region for three consecutive nights have brought bilateral relations to their lowest point in years.
According to reports from The Times of India, Anadolu Agency, and other media outlets, the government of Pakistan-controlled Kashmir stated on April 27 that India had released water from upstream of the Jhelum River in Kashmir without prior notice, causing a rapid rise in water levels downstream in multiple areas of Pakistan and even triggering floods. In response, India remained silent, neither confirming nor denying the matter.
The government of Pakistan-controlled Kashmir accused India of deliberately implementing "terrorism against water systems," stating that its action of releasing water without prior notice violated the Indus Waters Treaty. It was introduced that the Indus Waters Treaty, facilitated by the World Bank in 1960, is an agreement aimed at managing and supervising the distribution of water resources of the Indus River between the two countries. The treaty requires India and Pakistan to share information on water discharge to prevent damage to downstream areas.
Reuters reported that after a series of frictions and conflicts, bilateral trade between India and Pakistan has significantly shrunk, with last year's total trade volume reaching only $1.2 billion.
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