Finance Minister Ishaq Dar said in a statement to Reuters that he would attempt to reschedule around $27 billion in non-Paris Club debt, most of which is owing to China, but he would not seek haircuts as part of any restructuring.
Dar ruled out the likelihood of Pakistan’s debt default, an extension of the maturity date for bonds that are due in December, and a revision of the existing International Monetary Fund (IMF) programme in an interview.
The seasoned finance minister claimed that multilateral development banks and foreign donors have been “very flexible” in finding ways to meet Pakistan’s anticipated $32 billion in external financing demands following disastrous floods.
He said that some of this might come from repurposing money from development loans that had already been granted but were paying out more slowly.
Just over two weeks after entering office, Dar, who is attending the IMF and World Bank annual meetings, stated that Pakistan would seek restructuring on similar terms for all bilateral creditors.
When asked if he felt it would be difficult to convince China, the creditor of nearly $23 billion of the debt, to participate, he declined to respond.
He responded when asked if Pakistan would try to lower the debt’s principal “rescheduling is fine, but we are not seeking a haircut … That’s not fair”.
