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Arrangements made for $3.7bn worth of debt repayments: finance ministry

  • Debt repayment 'should not be any cause of concern', says Ministry of Finance
Published May 9, 2023

The Ministry of Finance on Tuesday moved to pacify concerns over Pakistan’s upcoming obligations, and said the government has made arrangements for the repayment of $3.7 billion debt due in May and June.

“The media has carried a news that $3.7 billion has to be repaid by GoP (Government of Pakistan) by the end of June, 2023, which is correct. However, this should not be any cause of concern as arrangements have been made for the rollover/repayment of this debt,” said the Finance Division in a statement.

“It may also be noted that during this period significant inflows are also in the pipeline,” it added.

“The coalition government has averted default and the economy is now on a course to stability and growth,” the Ministry of Finance added.

The statement comes after Bloomberg reported that Pakistan faces a total of $3.7 billion of debt payments starting this month.

“About $700 million of maturities are due in May and another $3 billion in June,” Krisjanis Krustins, a Hong Kong-based director at Fitch, said in an emailed response quoted by Bloomberg last week.

Fitch expects $2.4 billion of deposits and loans from China will be rolled over, the report added.

Concerns on Pakistan’s debt obligations are mounting as 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 debt payments also underscore the crucial need for Pakistan to resume its bailout programme with the International Monetary Fund (IMF) which has been stalled at the ninth review since November last year.

Various measures including a floating exchange rate, additional taxes, and hike in energy tariffs have failed to convince the IMF to resume the bailout.

Moody’s Investors Service also warned that Pakistan could default without an IMF bailout as the country faces uncertain financing options beyond June, reported Bloomberg on Tuesday.

“We consider that Pakistan will meet its external payments for the remainder of this fiscal year ending in June,” Grace Lim, a sovereign analyst with the ratings company in Singapore, was quoted as saying in an emailed response to Bloomberg.

“However, Pakistan’s financing options beyond June are highly uncertain. Without an IMF programme, Pakistan could default given its very weak reserves.”

Comments

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Aamir Latif May 09, 2023 02:57pm
Pakistan should take the bitter pill of life without IMF instead of sinking further in debts... GoP shluld have guts like Iran and Afghanistan surviving with sanctions... Country should face reality instead of life beying means
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Nawaz un Sharif - HeapBigShit May 09, 2023 04:10pm
@Faisal Waheed, Correction !!! "Pineapple" emirate of looters and boots.
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Kesar May 09, 2023 04:46pm
Famous last words....
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Tulukan Mairandi May 09, 2023 08:44pm
Not happening. Default is a given. By default we will default.
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WAHEED ALI MANGNEJA May 10, 2023 02:51am
New saazgar new riksha wat iz Pakistani price
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TimeToMovveOn May 10, 2023 04:21am
I really don't care what happens within Pakistan. But it has been a ride watching this country for the last 25 years. Pakistan's obsession with Kashmir gave the army the excuse to make itself more powerful. And when the army became powerful with the promise of delivering Kashmir, they took away democracy, took away the economy, and took away Pakistan's dignity. Today the country is lost, has no roadmap for progress, and civil war is imminent. Ayaz Amir, the great reporter, wrote in Dawn in 1998, and those words are more true now than ever: "Pakistan has sacrificed its identity on the alter of Kashmir. These were not mine; this was a Pakistani visionary who saw today. May Pakistan forge ahead with its quest for Kashmir with renewed zeal and continue with maximum vigor, its principled stand on Kashmir for another 75 years.
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Muhammad Ali May 10, 2023 09:40am
Pakistan needs foreign support like ever to feed corruption, tax evasion, utility companies plunder by powerful consumers & nepotism by fake politicians. Foreign loans are never used for progress & prosperity.
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