No haircuts, Pakistan seeks rescheduling of $27bn bilateral debt : Dar

No haircuts, Pakistan seeks rescheduling of $27bn bilateral debt Dar

Federal Minister for Finance and Revenue Ishaq Dar said that Pakistan would seek rescheduling of some $27 billion worth of non-Paris Club debt largely owed to China, but will not pursue haircuts as part of any restructuring.

In an interview with British News Agency, Reuters, the minister ruled out the possibility of a default on Pakistan’s debt, an extension of the maturity date on bonds due in December 2022 or renegotiation of Pakistan’s current International Monetary Fund (IMF) program.

He said multilateral development banks and international donors have been “quite flexible” with ways to meet Pakistan’s external financing needs to be estimated at about $32 billion after devastating floods. Some of this may come from reallocating funds from previously approved, slower-disbursing development loans, he added.

Dar, who is participating in the IMF and World Bank (WB) annual meetings, said that Pakistan will seek restructuring on equal terms for all bilateral creditors. On currency, the finance minister said Pakistan has not engaged in physical intervention in the currency, which has been battered this year by a strong US dollar, but which has rallied some 10 per cent since his appointment.

Dar said that he views the “true value” of the rupee at a level under 200 to the dollar. It last traded at 219. “I am for a stable currency, I am for a realistic rate. I am for market-based, but not subject to a currency being taken hostage” and making speculators billions of dollars, he added.

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To a question on whether he discussed with IMF officials the possibility of borrowing from the IMF’s new Resilience and Sustainability Trust for middle-income countries, Dar said, “We have discussed all options”.

He said IMF’s new emergency “food shock” borrowing window may also be a good fit for the country, which has lost crops due to devastating floods and may need to import up to half a million tons of wheat in the next year. “In this scenario, we have the possibility of approaching and accessing this facility,” he said.

IMF sympathises with Pakistan on flood damages, assures support

The International Monetary Fund (IMF) has sympathised with Pakistan for the losses caused by the recent floods across the country and assured of the fund’s support.

The assurance was made by IMF’s Director of the Middle East and Central Asia Department Jihad Azour in his meeting with Federal Minister for Finance and Revenue Mohammad Ishaq Dar. They also discussed the implementation of the IMF programme, according to a press statement received here on Saturday.

Meanwhile, the finance minister also met with the United Kingdom’s Minister of State for Foreign, Commonwealth and Development Office (FCDO), Ms Vicky Ford and thanked her government for financial support and assistance to meet the challenges posed by floods.

He also appreciated the trade concessions afforded to Pakistan and other developing countries under the Developing Countries Trading Scheme (DCTS).

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Minister Vicky Ford assured of the United Kingdom’s continued support for Pakistan during this difficult period. The two sides discussed ways to further deepen bilateral development cooperation. 

Dar led Pakistan’s delegation to the high-level round table on Pakistan’s floods – impact and response, co-chaired by Vice President World Bank, Martin Raiser and UK Prime Minister’s Special Representative for Afghanistan and Pakistan, Nigel Casey. 

Finance Minister Ishaq Dar in a meeting with Vice President World Bank in Washington DC. - No haircuts, Pakistan seeks rescheduling of $27bn bilateral debt : Dar
Finance Minister Ishaq Dar in a meeting with Vice President World Bank in Washington DC.

The round table was attended by all major bilateral and multilateral development partners and donors. 

Initial findings of Pakistan’s post-disaster need assessment jointly prepared by the World Bank, Asian Development Bank, UNDP, European Union and the Government of Pakistan were presented in the round table. 

In his concluding remarks, Finance Minister emphasised the need for providing adequate support to Pakistan to meet the challenges of recovery and rehabilitation. 

The minister had another meeting with the Chief Executive Officer Saudi Fund for Development (SFD), Sultan Abdul Rehman Al Murshid during which he conveyed Pakistan’s deep gratitude for the support provided by Saudi Arab to Pakistan at all times and welcomed the forthcoming visit of SFD team to Pakistan. 

Meanwhile, United States Assistant Secretaries, Ramin Toloui and Donald Lu called on Finance Minister Senator Mohammad Ishaq Dar at Pak Embassy to express solidarity with Pakistan over devastating floods and assure continued US support for Pakistan’s relief and recovery efforts. Other issues of mutual interest were also discussed, the statement added.

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