By Staff Reporter
ISLAMABAD: The Finance Ministry said on Tuesday it has made arrangements to repay or roll over the country’s $3.7 billion debt for this fiscal year.
“This should not be any cause of concern as arrangements have been made for the rollover/repayment of this debt,” the ministry said in a statement.
Pakistan’s economy has been in turmoil for months due to an acute balance of payment crisis, with its central bank reserves falling to cover just a month of controlled imports.
“Media has carried the news that 3.7 billion dollars have to be repaid by the government by the end of June 2023, which is correct,” it said.
“However, this should not be any cause of concern as arrangements have been made for the rollover/repayment of this debt.”
The minister said “It may also be noted that during this period significant inflows are also in the pipeline”.
“The coalition government has averted the default and the economy is now on a course to stability and growth.”
Earlier Fitch Ratings said faces a total of $3.7 billion of debt payments starting this month, including $700 million of maturities due in May and another $3 billion in June.
Fitch expects $2.4 billion of deposits and loans from China will be rolled over.
The debt payments underscore the crucial need for Pakistan to resume its bailout programme with the International Monetary Fund (IMF) that has been stalled since November last year.
A successful staff-level agreement (SLA) for the 9th review will unlock a $1.1-billion tranche.
Currently, foreign exchange reserves held by the State Bank of Pakistan (SBP) are at $4.46 billion, barely enough for a month of essential imports.
The Fitch also warned that the risks for Pakistan are large and the rating cut in February reflected that a default or debt restructuring is an increasingly real possibility for the country.
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