Pakistan’s new Finance Minister Ishaq Dar has said he will seekrescheduling of some $27 billion worth of non-Paris Club debt largely owedto China, but will not pursue haircuts as part of any restructuring.
In an interview with the British news agency, Ishaq Dar ruled out thepossibility of a default on Pakistan’s debt, an extension of the maturitydate on bonds due in December or renegotiation of Pakistan’s currentInternational Monetary Fund (IMF) programme.
Ishaq Dar said multilateral development banks and international donors havebeen “quite flexible” with ways to meet Pakistan’s external financing needsestimated at about $32 billion after devastating floods. Some of this maycome from reallocating funds from previously approved, slower-disbursingdevelopment loans, he added.
Dar, who is participating in the IMF and World Bank annual meetings justover two weeks after taking office, said that Pakistan will seekrestructuring on equal terms for all bilateral creditors. He declined tocomment when asked whether he thought it would be difficult to persuadeChina, creditor for about $23 billion of the debt, to participate.
But asked whether Pakistan would seek to reduce debt principal, Ishaq Darsaid “rescheduling is fine, but we are not seeking a haircut. That’s notfair.”
Asked whether he discussed with IMF officials the possibility of borrowingfrom the Fund’s new Resilience and Sustainability Trust for middle-incomecountries, Dar said: “We have discussed all options.”
The minister added that the IMF’s new emergency “food shock” borrowingwindow may also be a good fit for the country, which has lost crops due todevastating floods and may need to import up to half a million of tonnes ofwheat in the next year. “In this scenario, we have the possibility toapproaching and accessing this facility,” he said.
Read Top Stories
Dar, who served as Pakistan’s finance minister three previous times — mostrecently 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 hasrallied some 10 percent since his appointment.
Dar said that he views the “true value” of the rupee at a level under 200to the dollar. It last traded at 219. “I am for a stable currency, I am fora realistic rate. I am for market-based, but not subject to a currencybeing taken hostage” and making speculators billions of dollars.
In another interview with an
