Pakistan seeks rescheduling of $27 billion bilateral debt

WASHINGTON, Oct 14 (Reuters) – Pakistan’s new Finance Minister Ishaq Dar told Reuters on Friday he would seek to reschedule some $27 billion in non-Paris Club debt largely owed to China, but ‘He wouldn’t pursue haircuts as part of restructuring.

In an interview, Dar ruled out the possibility of a default on Pakistan’s debt, an extension of the maturity date of bonds due in December or a renegotiation of Pakistan’s current International Monetary Fund program.

The veteran finance minister said multilateral development banks and international donors have been “quite flexible” with the means to meet Pakistan’s external financing needs estimated at around $32 billion after the devastating floods. Some of that may come from the reallocation of funds from previously approved, slower-disbursing development loans, he added.

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Dar, who is attending the IMF and World Bank annual meetings just over two weeks after taking office, said Pakistan would seek to restructure on an equal footing with all bilateral creditors.

He declined to comment when asked if he thought it would be difficult to persuade China, the creditor of about $23 billion in debt, to participate.

But when asked if Pakistan would seek to reduce its debt principal, he replied that “rescheduling is fine, but we are not looking for a haircut. It is not fair “.

RUPE DEFENDER

Dar, who served as Pakistan’s finance minister three times – most recently from 2013 to 2017 – is known as a strong supporter of the rupee. He said Pakistan had not engaged in physical intervention in the currency, which has been battered this year by a strong US dollar but has risen around 10% since his appointment.

Dar said he considered the “true value” of the rupiah at less than 200 to the dollar. It last traded at 219.

“I am for a stable currency, I am for a realistic rate. I am for the market, but not subject to a currency held hostage” and making speculators billions of dollars.

BORROWING OPTIONS

Asked if he had discussed with IMF officials the possibility of borrowing from the Fund’s new Resilience and Sustainability Trust Fund for Middle Income Countries, Dar said: “We have discussed of all the options”.

Pakistan’s finance minister added that the IMF’s new “food shock” emergency borrowing window could also suit the country, which has lost crops due to devastating floods and may need to import up to to half a million tonnes of wheat over the next few years. year.

“In this scenario, we have the ability to approach and access this facility,” he said.

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Reporting by David Lawder; Editing by Sandra Maler

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