Pakistan repays over $1b external debt
All efforts being made to avoid default, says minister
The country has successfully repaid over one-billion-dollar external debt to international financial institutions.
Although the country is facing a serious crisis of foreign exchange reserves, it is meeting international financial obligations to avoid default. Sources said that cumulatively, the country repaid some $1.2 billion to the two foreign banks.
"Pakistan has paid back $600 million to the Emirates NBD Bank, the leading Banking Group in the MENAT region, and $420 million to the DIB on Friday," sources in the State Bank of Pakistan (SBP) confirmed.
The country's foreign exchange reserves are already sliding due to continued external debt servicing and slow foreign inflows. With the repayment of this loan, the country's total liquid foreign exchange reserves further dipped by $1 billion.
Although the actual statistics of foreign exchange reserves will be released by the State Bank in its weekly report to be issued on Thursday, however, as per estimates, with the current repayment, the reserves held by the SBP would decline to $4.4 billion. However, overall foreign exchange reserves are likely to be around $10.3 billion. The government has already taken a number of steps to curtail the import bill to manage its external debt obligations.
In addition, Pakistan is also making efforts to get loans from the other international lenders to build the depleting foreign exchange reserves and avoid default. Pakistan is also trying to finish the 9th IMF review so the other financial institutions like World Bank, Asian Infrastructure Investment Bank (AIIB), and other lenders may release their loans.
Prime Minister Shehbaz Sharif, on Saturday, has also requested the IMF chief for immediate completion of 9th review, so that the country can get the next tranche of Extended Fund Facility (EFF). "In a phone call with the Managing Director of the IMF yesterday, I told her about the government's resolve to complete the terms of the IMF's program.
I also explained Pakistan's economic difficulties especially after the devastating floods. The IMF delegation will come to Pakistan soon", the Prime Minister said on twitter. Sources said that the country's foreign exchange reserves may further decline as the country has to pay back some more foreign debt in coming months.
Meanwhile, Interior Minister
Rana Sana ullah has said that all-out efforts are being made by the PDM government headed by Shehbaz Sharif to overcome the economic crisis so that Pakistan can avert default. Addressing the inauguration ceremony of a Nadra office on Jhang Road in his constituency on Saturday, he said the country was facing the price hike and economic crisis due to strict conditions of IMF. These policies of the global lender put pressure on the PDM government to withdraw subsidies given to the masses, he said, adding that IMF also wanted Pakistan to raise the prices of petroleum products and electricity.
"If we back out from these conditionalities, then our economic survival will become next to impossible and even our friendly countries cannot extend financial help to us," APP quoted him as saying.
Taking a swipe at PTI chief Imran Khan, the minister claimed that one of the reasons behind the current economic crisis was the propaganda being made by the former prime minister that Pakistan would soon default although he himself was actually responsible for the mess that happened due to "wrong" policies pursued by the PTI government. He accused the Pakistan Tehreek-i-Insaf chief of conspiring for the country to default.