State Bank of Pakistan Governor Jameel Ahmed has claimed that the debt repayment issue is entirely under control and that all external payment commitments will be honoured on schedule in an effort to calm the financial market amid rising worries of default.
Will Pakistan Default?
Mr. Jameel expressed complete confidence that Pakistan will not default on its debts while recommending analysts to revise their assumptions on debt repayment.
We anticipated Pakistan will require $33 billion in funding during FY23, Mr. Jameel said in a podcast interview with SBP Chief Spokesman Abid Qamar on Thursday. “The country would need to repay $23 billion with a projected $10 billion current account deficit,” he said.
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“Out of this, we have already paid $6 billion, and $4 billion was allocated for bilateral loans with a rollover agreement.” “We have to pay $13 billion throughout the course of this fiscal year.”
In addition, $8.3 billion of this $13 billion is made up of government and government-related loans. We are very certain that the $8.3 billion will likewise be renewed.
“The remaining $4.7 billion, which includes $1.1 billion in commercial bank loans, needs to be paid. $3.5 billion of total $4.7 billion is made up of multilateral loans. These must be paid back.”
Total Remittances This Year
However, the first five months’ inflows only totaled $4 billion. He expressed certainty that inflows would occur in the second half of the current fiscal year, increasing the nation’s foreign exchange reserves. Instead of expressing alarm over the low foreign exchange reserves, the governor expressed optimism for greater inflows in the second half of the current fiscal year.
He said that in addition to the $1 billion in Sukuk-related payments, Pakistan also gave two commercial banks additional $1.2 billion. According to a contract we have with these institutions, they will relend the $1.2 billion in a few days, he stated.