Thursday, December 7, 2023

Ishaq Dar leaves for US for meetings with IMF and World Bank

Finance Minister Ishaq Dar left for a visit to the United States on Tuesday, the finance ministry said. During his visit, the minister will attend the annual meetings of the International Monetary Fund (IMF) and the World Bank. He is also expected to hold direct talks with their officials.

A day earlier, Dar reaffirmed Pakistan’s commitment to complete the IMF programme with all its conditions in an honourable manner and meet all repayment obligations to multilaterals, bond holders and Paris Club creditors. He said the ninth review with the IMF was scheduled for October 25 and ruled out any consideration for renegotiating the IMF agreement when it was in the last leg of its completion. He also shared that Pakistan was seeking a rescheduling of bilateral debt, which now stands at around $27 billion.

However, he ruled out the rescheduling of international debt from wealthy western nations under Paris Club, multilaterals and international sovereign bonds. The minister said there was no point in Paris Club rescheduling debt because the overall debt to these creditors was no more than 11 per cent of total foreign debt and debt relief over the year would be less than $1.2bn. Pakistan owes Paris Club countries a combined sum of around $10.7bn.“When we are going to arrange $32-34bn for external payments, another $1.2bn is no big issue,” Dar said.

Pakistan will not seek Paris Club debt restructuring, says Ishaq Dar

Dar has said that Pakistan will not seek debt restructuring from Paris Club creditor nations. The statement comes after Prime Minister Shehbaz Sharif last month made an appeal to the Paris Club for a debt moratorium after the country’s already struggling economy was hit by devastating floods that his government estimates will cause economic losses up to $30 billion.

Earlier, the deputy governor of the State Bank of Pakistan, Murtaza Syed, told a briefing on Monday that Pakistan had secured an additional $4 billion in funds from multilateral lenders.

Pakistan’s external financing requirements for the current financial year were estimated at around $31 billion, and it had shown a funding cushion of about $6 billion to shore up fast-depleting reserves, which currently stand at $7.8 billion. The Asian Development Bank is expected to disburse $1.5 billion, the Asian Infrastructure Investment Bank $500 million, World Bank $1 billion, and about $1 billion from the United Nations in flood aid, Syed said.

These funds should “more than makeup” any effect on the current account and also any delay in plans to raise $2 billion from bonds this financial year to meet financing requirements.

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