IMF loan remains locked for crisis-hit Pakistan, FM Ishaq Dar hints at ‘Plan B’. Details here
2 min read 12 Jun 2023, 07:05 AM ISTPakistan's Finance Minister, Ishaq Dar, has hinted at the government's Plan B and is reportedly writing off the International Monetary Fund (IMF) program.
PremiumPakistan Finance Minister Ishaq Dar on Sunday hinted at the government's ‘Plan B’, apparently writing off the International Monetary Fund (IMF) program. It is working immediately next month on rescheduling the bilateral external debt of over USD 27 billion, according to a report published by Dawn.
Addressing the post-budget news conference, the minister ruled out any talks about restructuring external debt with multilateral agencies or Paris Club as it is "not a dignified thing to do."
He said that Pakistan will not bother multi-laterals, hence, “rescheduling Paris Club [loan] is not on our menu". Dar expected little from the Washington-based financial body beyond disbursements under the delayed ninth IMF review which would have released USD 1.1 billion in installments.
"There is no chance for the 10th review" meaning that the current IMF program of USD 6.5 billion will conclude at around USD 5.1 billion without the remaining 10th and 11th reviews for USD 1.4 billion funds," the Pakistan minister said as quoted by Dawn.
However, Dar did not name any country when he was asked about debt rescheduling with bilateral partners like China. He even said that this was something the government intended to begin working on early in the next fiscal year after the budget is passed.
Pakistan's overall bilateral debt amounts to around USD 37 billion. However, there is little space in around USD 10bn Paris Club debt due to its recent rescheduling under G-20 Debt Service Suspension Initiative (DSSI), ANI reported.
Further, he rejected the possibility of sovereign default by any stretch of the imagination, saying that Pakistan will ensure repayments to all multilateral creditors.
Ishaq Dar even criticized the Pakistan Tehreek-e-Insaf (PTI) government for making legal changes in the central law under the IMF program which he stressed “crippled the government", the report said.
During his previous tenure, the Pakistan government used to borrow from the central bank and repay at the end of each quarter. However, he noted that the banks had increased their spread by up to 2% over the central bank's policy rate, as per Dawn reports.
He assured that the government will soon introduce a new system in which treasury bills could be directly sold to the people rather than restricting them to commercial banks.
(With ANI inputs)