KARACHI: In a move to soothe the financial market amid growing fears of default, State Bank of Pakistan Governor Jameel Ahmed has said the debt repayment situation is completely under control and all the external payment obligations will be met in time.
While advising analysts to correct their views about debt repayments, Mr Jameel expressed full confidence that Pakistan will not default.
In a podcast interview with SBP Chief Spokesman Abid Qamar on Thursday, Mr Jameel said at the outset of the current fiscal year we planned Pakistan would need $33 billion in financing during FY23. “With a projected $10bn current account deficit the country would need to repay $23bn,” he said.
Out of this, we have already paid $6bn and $4bn was bilateral loans which were agreed upon for rollover. “Now we have to pay $13bn during the rest of this fiscal year,” he said.
Moreover, out of this $13bn, the government and government-related loans are $8.3bn. We have full confidence that this $8.3bn will also be rolled over.
The rest of $4.7bn remains to be paid which included $1.1bn commercial banks loans. Out of this $4.7bn, the multilateral loans are $3.5bn. These are to be repaid.
However, the inflows in the first five months were just $4bn. He expressed confidence that the inflows will come in the 2nd half of the current fiscal year which will build foreign exchange reserves of the country. The governor did not show any concern about the low foreign exchange reserves rather he was hopeful for higher inflows in the next half of the current fiscal year.
He said along with $1bn in Sukuk-related payments, Pakistan also paid another $1.2bn to two commercial banks. “We have an agreement with these banks that they will re-lend the $1.2bn in a few days,” he said.
He believes that $3bn will come from friendly countries as talks are underway. He reiterated that only $1.1bn commercial loans are to be paid. He said some analysts were painting a negative picture of Pakistan’s ability to pay back foreign debts. He said the situation is completely under control.
On the question of import-related restrictions, he said that initially only 15pc of all imports came under administrative measures, while there were no curbs on the rest. It has been further reviewed after consultations with the trade and industry. Currently, over 90pc imports are without restrictions, he said.
He also made it clear that the import of oil and raw material for medicines have no restrictions. He said all backlogs regarding the imports have been cleared till the end of October. He said small L/Cs up to $50000 were cleared while it has been increased to $100000.
Talking about restrictions on the import of machinery, he said those who have achieved 75pc completion, have been allowed to import the rest 25pc of machinery.
He said administrative measures to put restrictions on some imports will be removed gradually.
Published in Dawn, December 9th, 2022