Daily Times

Federal Minister for Finance and Revenue, Mohammad Ishaq Dar said that Pakistan would seek rescheduling of some $27 billion worth of non-Paris Club debt largely owed to China, but will not pursue haircuts as part of any restructuring.

In an interview with British News Agency, Reuters, the minister ruled out the possibility of a default on Pakistan’s debt, an extension of the maturity date on bonds due in December or a renegotiation of Pakistan’s current International Monetary Fund (IMF) program.

He said multilateral development banks and international donors have been “quite flexible” with ways to meet Pakistan’s external financing needs estimated at about $32 billion after devastating floods. Some of this may come from reallocating funds from previously approved, slower-disbursing development loans, he added.

Dar, who is participating in the IMF and World Bank (WB) annual meetings, said that Pakistan will seek restructuring on equal terms for all bilateral creditors. On currency, the finance minister said Pakistan has not engaged in physical intervention in the currency, which has been battered this year by a strong U.S. dollar, but which has rallied some 10% since his appointment.

Dar said that he views the “true value” of the rupee at a level under 200 to the dollar. It last traded at 219. “I am for a stable currency, I am for a realistic rate. I am for market-based, but not subject to a currency being taken hostage” and making speculators billions of dollars, he added.

To a question on whether he discussed with IMF officials the possibility of borrowing from the Fund’s new Resilience and Sustainability Trust for middle-income countries, Dar said, “We have discussed all options”.

He said IMF’s new emergency “food shock” borrowing window may also be a good fit for the country, which has lost crops due to devastating floods and may need to import up to half million of tons of wheat in the next year. “In this scenario, we have the possibility to approaching and accessing this facility,” he said.