By Staff Reporter
ISLAMABAD: Pakistan will ask some of its bilateral creditors to ease its debt repayment terms, Finance Minister Ishaq Dar said on Saturday, as the country faces uncertainty over completing an International Monetary Fund (IMF) bailout program that expires this month.
The minister said Pakistan would not seek relief from the Paris Club of creditor nations or haircuts on its debt. Instead, the government would seek to reschedule its debt payments and extend the repayment period.
“You can always negotiate with bilateral countries, not for a haircut or write-off, but for long-term rescheduling of debt, with the request to backload the principal amount and payment of servicing,” Dar told a news conference, a day after releasing the budget for the 2023-24 fiscal year. “We’ll see how things go,” he said, regarding whether to restructure or reprofile debt.
Dar said the country would seek restructuring from bilateral lenders regardless of whether it completes an IMF program.
“We cannot print dollars, so the debt restructuring from bilateral partners is under consideration. However, external loan restructuring from the Paris Club or multilateral donors such as the IMF, World Bank, and Asian Development Bank will not be sought at all.”
Pakistan’s IMF program runs out this month with about $2.5 billion in funds yet to be released as it struggles to strike an agreement with the lender. The country is grappling with record inflation, fiscal imbalances, and critical levels of reserves that cover barely a month’s worth of imports.
Bilateral creditors made up $37 billion of Pakistan’s debt in the fiscal year 2021, out of which $23 billion is owed to China.
Dar said he was “hopeful” that Pakistan would pass its next IMF review, the country’s ninth, but that he “didn’t think” it would clear reviews beyond that.
“The chances of completing the 10th review of the IMF program are over, but I hoped to complete the 9th review by June 30 and receive $1.2 billion from the fund.”
The government had projected $2.4 billion from the IMF in its budget for 2023-24, but now it would try to bridge the financing gap with $3.5 billion in commercial lending, Dar said.
The minister said the government had not decided whether to seek a new loan program from the IMF.
Dar ruled out the possibility of restructuring domestic debt, saying it was not an appropriate time for a sovereign state to do so.
The minister said the government was planning to allow investments into Treasury Bills by the public to reduce reliance on banks.
Copyright © 2021 Independent Pakistan | All rights reserved
