WASHINGTON: Finance Minister Ishaq Dar has said that he will seek escheduling of $27 billion in non-Paris Club debt, most of which is owing to China, but he won’t try to get any haircuts as part of any restructuring.
“There is no chance of default for Pakistan and we are gaining slow financial strength, and extension of bond maturity date, is due in December or possibility to engage with International Monetary Fund (IMF) for renegotiation of the country’s financial programme,” he told Reuters.
Dar said that multilateral development banks and foreign donors have been “very flexible” in finding ways to meet Pakistan’s anticipated $32 billion in external financing demands following disastrous floods. He said that some of this might come from repurposing money from development loans that had already been granted but were paying out more slowly. Dar responded, “We have explored all options,” when asked if he had brought up the prospect of middle-income countries borrowing from the IMF’s new Resilience and Sustainability Trust.
The Pakistani finance minister noted that the country, which has suffered crop losses due to disastrous floods and may need to import up to 500,000 tonnes of wheat in the coming year, may also benefit from the IMF’s new emergency “food shock” borrowing window.
Just over two weeks after entering office, Dar, who is attending the IMF and World Bank annual meetings, stated that Pakistan will seek restructuring on similar terms for all bilateral creditors.
Dar, who has held the position of finance minister for Pakistan three times, most recently from 2013 to 2017, is renowned for being a fervent supporter of the rupee. He said that despite the strong U.S. dollar battering Pakistan’s currency this year, which has recovered almost 10% since his appointment, Pakistan has not physically intervened in the market.
