Finance Minister Ishaq Dar, who is participating in IMF and World Bank annual meetings in Washington, says his country will seek restructuring on equal terms for all bilateral creditors.
Pakistan’s new Finance Minister Ishaq Dar has said he will 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 the Reuters news agency, Dar ruled out the possibility of a default
on Pakistan’s debt, an extension of the maturity date on bonds
due in December or renegotiation of Pakistan’s current
International Monetary Fund (IMF) programme.
The veteran finance minister said multilateral development
banks and international donors have been “quite flexible” with
ways to meet Pakistan’s external financing needs 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 annual
meetings just over two weeks after taking office, said that
Pakistan will seek restructuring on equal terms for all
bilateral creditors.
He declined to comment when asked whether he thought it
would be difficult to persuade China, creditor for about $23
billion of the debt, to participate.
But asked whether Pakistan would seek to reduce debt
principal, he said “rescheduling is fine, but we are not seeking
a haircut. That’s not fair.”
Options for borrowing
Asked whether he discussed with IMF officials the possibility of borrowing from the Fund’s new Resilience and Sustainability Trust for middle-income countries, Dar said: “We have discussed all options.”
The Pakistan finance minister added that the 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 of tonnes of wheat in the next year.
“In this scenario, we have the possibility to approaching and accessing this facility,” he said.
Rupee ‘true value’
Dar, who served as Pakistan’s finance minister three
previous times — most recently from 2013 to 2017 — is known as
a staunch defender of the rupee.
He 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 percent 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.
Source: Reuters
Pakistan seeks rescheduling of $27B bilateral debt
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