Pakistan seeks rescheduling of $27 billion bilateral debt: Dar FM Ishaq Dar said Reuters on Friday that it will seek the rescheduling of some $27 billion of non-Paris Club debt that is largely owed to China, but will not seek cuts as part of any restructuring.
In an interview, Dar ruled out the possibility of a Pakistan debt default, an extension of the maturity date of bonds due in December, or a renegotiation of Pakistan’s current International Monetary Fund (IMF) program.
The veteran finance minister said multilateral development banks and international donors have been “quite flexible” with ways to meet Pakistan’s estimated $32 billion in external financing needs after the devastating floods.
Some of this may come from reallocating funds from previously approved slower-disbursing development loans, he added.
Dar, who is attending the IMF and World Bank annual meetings just over two weeks after taking office, said Pakistan would seek restructuring on equal terms for all bilateral creditors.
He declined to comment when asked if he thought it would be difficult to persuade China, which bears some $23 billion of the debt, to participate.
But when asked if Pakistan would seek to reduce the principal of the debt, he said that “rescheduling is fine, but we are not looking for a haircut. That’s not fair.”
Dar, who has served as finance minister on three previous occasions, most recently from 2013 to 2017, is known as a strong supporter of the rupee. He said Pakistan has not engaged in physical intervention in the currency, which has been hit this year by a strong US dollar, but has risen 10 percent since his appointment.
Dar said he sees the “real value” of the rupee at a level below 200 to the dollar. It was last traded in 219.
“I am for a stable currency, I am for a realistic rate. I am for the market, but I am not subject to a currency being held hostage and making speculators billions of dollars.”
Asked if he discussed with IMF officials the possibility of borrowing from the Fund’s new Sustainability and Resilience Trust for middle-income countries, Dar said: “We’ve discussed all the options.”
The finance minister added that the IMF’s new “food shock” emergency lending window may also be a good option for the country, which has lost crops due to devastating floods and may need to import up to half a million tons of wheat next year.
“In this scenario, we have the ability to approach and access this facility,” he said.
Meetings with officials
Separately, the minister held multiple meetings with officials from the IMF, World Bank, Saudi Arabia, the United Kingdom and the United States.
In one of a series of press releases, the Finance Ministry stated that Dar led the Pakistani delegation at a high-level roundtable discussion on the recent floods that was co-chaired by World Bank Vice President Martin Raiser and the SREP of the UK Prime Minister for Afghanistan and Pakistan. Nigel Casey.
The round table was attended by all major bilateral and multilateral development partners and donors. “The roundtable presented the initial findings of the Pakistan Post-Disaster Needs Assessment, prepared jointly by the World Bank, Asian Development Bank, UNDP, EU and the Government of Pakistan.
“In his closing remarks, the finance minister emphasized the need to provide adequate support to Pakistan in meeting the challenges of recovery and rehabilitation,” the press release stated.
Dar also met with the Director of the IMF’s Middle East and Central Asia Department, Jihad Azour, and discussed implementation of the ongoing program. For its part, Azour assured the finance minister of the fund’s support.
US Undersecretaries Ramin Toloui and Donald Lu called on Dar at the Pakistani embassy to express solidarity with Pakistan over the devastating floods and ensure continued US support for Pakistani relief and recovery efforts. Pakistan.
Other mutual interests were also discussed, adds the press release from the Ministry of Finance.
In his meeting with Saudi Development Fund CEO Sultan Abdul Rehman Al Murshid, Dar conveyed Pakistan’s “deep gratitude” for Saudi Arabia’s support to Pakistan at all times and welcomes the upcoming visit of the SFD team to Pakistan. Murshid assured Dar of the continued support of the SFD.
Dar also met with the UK’s Minister of State for Development at the Foreign, Commonwealth and Development Office, Vicky Ford, and thanked her country for its financial support and assistance in meeting the challenges posed by the floods.
The finance minister also welcomed the trade concessions given to Pakistan and other developing countries under the DCTS Scheme.
The two sides discussed ways to further deepen bilateral development cooperation, the Finance Ministry said.