ISLAMABAD:Finance Minister Muhammad Aurangzeb said that three bilateral creditors had agreed to roll over the $12 billion debt for one year, as the International Monetary Fund (IMF) is likely to approve Pakistan’s $7 billion bailout package on the 28th of this month.
There was no delay in the IMF Executive Board meeting, which is going to take place by the end of this month to approve the $7 billion Extended Fund Facility, Aurangzeb said, while talking to reporters after a meeting of the Senate Standing Committee on Finance.
The Executive Board is scheduled to meet on August 28th to approve the $7 billion package, according to government officials. The development marks an end to the uncertainty over the timing of the Executive Board meeting, which was contingent upon the rollover of debts by Pakistan’s three traditional creditors.
Aurangzeb said that the $12 billion cash deposits by China, Saudi Arabia and the United Arab Emirates (UAE) would be rolled over for one year, like last time. Earlier, he had said that the IMF had asked for the rollover for three to five years before the Executive Board meeting.
However, he clarified that the requirement was to secure the rollover for one year but the government was trying to have these rollovers for three to five years. He added that the three bilateral creditors had agreed to roll the loans over on the existing terms and conditions.
The IMF had announced a staff-level agreement for the $7 billion last month subject to the approval of the Executive Board and securing financing commitments from the bilateral and multilateral creditors.
The finance minister said that there was no point in asking for an increase in the interest rates on these loans when the country’s foreign exchange reserves had strengthened compared to a year ago. The IMF, he added, had identified only a $3-5 billion financing gap over the three-year programme period, which was quite manageable.
“Pakistan has also received an offer from a foreign commercial bank but we are waiting for the IMF Board approval to ask the lender to cut the offered interest rates,” said Aurangzeb. The offer had come from a non-Gulf and non-Chinese commercial bank, he added, without disclosing the name.
