ISLAMABAD: Pakistan has to cough up $1.7 billion on account of foreign debt repayments till December this year, official data showed on Friday, posing risks to the country’s already shrinking foreign exchange reserves.
The data gathered from different ministries showed that the country needs to make debt servicing of more than $1.7 billion in shape of principal and markup on outstanding foreign loans during the current second quarter.
Bank of Pakistan (SBP) showed that its reserves decreased $98 million to $7.67 billion on November 2 owing to external debt servicing.
Though Saudi Arabia promised three billion dollars to replenish the SBP’s foreign exchange reserves, but the central bank has not received the inflows as yet. The debt servicing has assumed immense importance at a time when Pakistan is negotiating a possible bailout package with the visiting International Monetary Fund’s (IMF) team.
In July, China pumped two billion dollars to build Pakistan’s foreign exchange reserves. The project financing nosedived by almost 40 percent so far in the current fiscal year owing to inability of Islamabad to timely approve donors-funded projects owing to political transition and imposition of ban on development funds four months ago by the Election Commission of Pakistan.
Finance ministry’s officials apprised the caretaker in-charge of the ministry Shamshad Akhtar of the situation, but she couldn’t promptly act and nor convene meetings of the Central Development Working Party and the Executive Committee of National Economic Council meetings to avoid choking of dollar inflows.
“The project financing has badly dried and only few million dollars were poured during the period against multimillion dollars received in the same period of the last fiscal year,” an official said, requesting anonymity.
The finance ministry estimated that Islamabad would have to repay around $700 million to multilateral creditors, $400 million to bilateral creditors, $76 million to the IMF, $298 million on account of commercial loans and $200 million on account of bond repayments during the October-December period. Further, the government is going to repay $129 million to the Asian Development Bank, $65 million to the International Bank for Reconstruction and Development, $102 million to the International Development Association, $24 million to the Islamic Development Bank, $141 million to the Islamic Development Bank (ST), and one million dollar each to the International Fund for Agriculture Development and the Organization of the Petroleum Exporting Countries Fund.
In November, the government will have to repay $572 million as principal and $146 million as interest payment on loans. The government will also have to pay back $34 million to the IMF during the month.
On bilateral creditors repayment, Islamabad is going to repay one million dollar to Australia, two million dollar to Belgium, $10 million to Canada, four million dollars to China, $81 million to France, $46 million to Germany, three million dollars to Italy, $156 million to Japan, $18 million to Korea, one million dollar to Kuwait, one million dollar to Norway, six million dollar to Russia, one million dollar to Spain, six million dollar to Sweden, four million dollar to Switzerland, one million dollar to UAE and $61 million to USA.