Pakistan seeks rescheduling of $27 bln bilateral debt-finance minister

[HAIDER]

Pakistan seeks rescheduling of $27 bln bilateral debt-finance minister​

By David Lawder
and Jorgelina Do Rosario

WASHINGTON, Oct 14 (Reuters) - Pakistan's new finance minister, Ishaq Dar, told Reuters on Friday that he will 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, Dar 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 program.

The veteran finance minister 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 annual meetings just over two weeks after taking office, said that Pakistan will seek restructuring on equal terms for all bilateral creditors.

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

But asked whether Pakistan would seek to reduce debt principal, he said "rescheduling is fine, but we are not seeking a haircut. That's not fair."

RUPEE DEFENDER​

Dar, who served as Pakistan's finance minister three previous times -- most recently from 2013 to 2017 -- is known as a staunch defender of the rupee . He 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.

BORROWING OPTIONS​

Asked 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."

The Pakistan finance minister added that the 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.

 

[epebble]

The minister may rule out the possibility of default on Pakistan's debt, but rescheduling is soft default. A non-default would be paying off followed by thank you and goodbye.

 

[RealNapster]

Pakistan seeks rescheduling of $27 bln bilateral debt-finance minister​

By David Lawder
and Jorgelina Do Rosario

WASHINGTON, Oct 14 (Reuters) - Pakistan's new finance minister, Ishaq Dar, told Reuters on Friday that he will 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, Dar 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 program.

The veteran finance minister 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 annual meetings just over two weeks after taking office, said that Pakistan will seek restructuring on equal terms for all bilateral creditors.

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

But asked whether Pakistan would seek to reduce debt principal, he said "rescheduling is fine, but we are not seeking a haircut. That's not fair."

RUPEE DEFENDER​

Dar, who served as Pakistan's finance minister three previous times -- most recently from 2013 to 2017 -- is known as a staunch defender of the rupee . He 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.

BORROWING OPTIONS​

Asked 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."

The Pakistan finance minister added that the 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.

Did he told China that "meet me and reverse this or else I will give you a befitting response " ?

 

[Maula Jatt]

I'm thinking what happens if we just say let's f it
Default and start a fresh?

 

[epebble]

I'm thinking what happens if we just say let's f it
Default and start a fresh?

No private sector loans for a long time. It is de facto now, will become de jure then. Only loans available will be multilateral agencies, which will also slow walk them. It is already happening slowly, but the footsteps will become louder. There is one country in the world that is a poster boy for habitual default - Argentina. It has become so famous that nobody wants to do anything, financially, with them.

 

[ahaider97]

I'm thinking what happens if we just say let's f it
Default and start a fresh?

marzi wali bat ha khud to tu amrika betha ha bijli pani idhar hmara band ho ga

 

[Bilal Khan (Quwa)]

Ishaq Dar's economic policy. In a nutshell.

 

[Skull and Bones]

Is that a civilized word for ‘default’?

 

[CrazyZ]

No private sector loans for a long time. It is de facto now, will become de jure then. Only loans available will be multilateral agencies, which will also slow walk them. It is already happening slowly, but the footsteps will become louder. There is one country in the world that is a poster boy for habitual default - Argentina. It has become so famous that nobody wants to do anything, financially, with them.

IMO, Pakistan should declare a moratorium on new foreign loans except for critical things like food. Current government has finally banned building any new power plants that use imported fuel. It has also banned imports of luxuries. All good steps. It now needs to place a ban on foreign debt.

 

[epebble]

IMO, Pakistan should declare a moratorium on new foreign loans except for critical things like food. Current government has finally banned building any new power plants that use imported fuel. It has also banned imports of luxuries. All good steps. It now needs to place a ban on foreign debt, IMO.

I think numbers won't work with petroleum imports. With $100+ oil, there is nothing Pakistan can do with just remittances and exports. Only way out is cut down on petroleum import and go for conservation and public transport. If not, Sri Lanka is certain. And there is no way food import can be avoided with a third of cultivable land underwater.

 

[CrazyZ]

I think numbers won't work with petroleum imports. With $100+ oil, there is nothing Pakistan can do with just remittances and exports. Only way out is cut down on petroleum import and go for conservation and public transport. If not, Sri Lanka is certain. And there is no way food import can be avoided with a third of cultivable land underwater.

Status quo is not working. We must live within our means. This is the root cause of the problem. We need to consume less and produce more. Every rooftop should be growing food. Petrol imports needs to be slashed by any means necessary, bicycles, electric mass transit, car pooling, smaller motorcycles. Thar coal should be turned to ammonia, petrol, diesel or petrochemicals.

 

[Wood]

I'm thinking what happens if we just say let's f it
Default and start a fresh?

Take a look at Sri Lanka and where they go from here.

 

[Hakikat ve Hikmet]

Officially, 60% of fuel is smuggled into Pak. Make it 95%....

Currently, 80% of the Pak economy is undocumented. Make it 95%....

Desperate time, desperate measures....

Come December, both Bajwa and Biden are going to be lame ducks suffering from ED....

 

[Skull and Bones]

Officially, 60% of fuel is smuggled into Pak. Make it 95%....

Currently, 80% of the Pak economy is undocumented. Make it 95%....

Desperate time, desperate measures....

Come December, both Bajwa and Biden are going to be lame ducks suffering from ED....

Erdogan must be an erudite in economics and finances.

 

[epebble]

Status quo is not working. We must live within our means. This is the root cause of the problem. We need to consume less and produce more. Every rooftop should be growing food. Petrol imports needs to be slashed by any means necessary, bicycles, electric mass transit, car pooling, smaller motorcycles. Thar coal should be turned to ammonia, petrol, diesel or petrochemicals.

Exactly, this is what is surprising. Every time someone in USA breaks wind, Pakistan government and commentariat go to Defcon 1. But, running out of petroleum or food - crickets. Not a squeak from anyone about conservation or economizing imported petroleum. No exhortation about public transport or growing food around homes as in victory gardens.