Finance Minister Ishaq Dar is looking forward to 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 Reuters, Dar ruled out the possibility of a default on Pakistan’s debt, an extension of the maturity date on bonds due in December or a renegotiation of Pakistan’s current International Monetary Fund programme.
Dar 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.”
IMF, World Bank and Islamic Development Bank (IsDB), a day earlier, have assured of their continued support to Pakistan at a time when the country was facing socioeconomic challenges owing to recent floods that have damaged economy badly.
The assurances were made during the separate meetings of Federal Minister for Finance and Revenue, Mohammad Ishaq Dar with IMF Deputy Managing Director, Ms. Antoinette Sayeh; President World Bank, David Malpass and IsDB President, Dr. Muhammad Sulaiman Al Jasser.
The IMF Deputy Managing Director appreciated the government’s policies and assured of IMF’s continued support to Pakistan.