Country to repay around $8.3b in next three months

ISLAMABAD: Amid the dwindling foreign exchange reserves, Pakistan will have to repay approximately $8.3 billion in shape of external debt servicing over the next three months (Jan-March) of the current fiscal year. 

Out of $8.3 billion outstanding debt servicing, Pakistan will have to get rollover of $2 billion from the UAE during the next three months of the current fiscal year. 

There is another outstanding commercial loan repayment of $700 million to Chinese banks which Pak authorities are expecting to be refinanced. The principal amount of debt servicing stands at $5.035 billion in the next three months, while the interest repayment is hovering around $426.88 million, so in totality, the outstanding amount has gone up to $5.462 billion.

Alone in January 2023, the government will have to repay $600 million on account of commercial loans out of which $400 million will be paid back to a Dubai-based bank.

The repayment of debt servicing includes deposits of $2 billion from the UAE, which Islamabad expects to get as a rollover. Pakistan is going to make a request to the UAE authorities for one-year rollover.

The country also expects $700 million in re-financing from China but first it will have to pay back to the Chinese banks.

Out of the total outstanding amount, another largest liability would become due on account of commercial loans as Islamabad would have to repay almost $2 billion under this head in the next three months.

The principal amount of commercial loans would be standing at $1.635 billion while interest repayment will be hovering around $336.53 million within the next three months of the current fiscal year.

The foreign exchange reserves held by the SBP stood at $6.11 billion on December 22, 2022 against $10.8 billion in April 2022 when the PDM-led regime took over the reins of power after ousting Imran Khan through the vote of no-confidence.

“The remaining outstanding amount of debt servicing stood at $5.462 billion in the next three months (January-March) period of the current fiscal year 2022-23,” top official sources confirmed to The News on Wednesday.

The principal amount of debt servicing stands at $5.035 billion in the next three months, while the interest repayment is hovering around $426.88 million, so in totality, the outstanding amount has gone up to $5.462 billion.

There are five outstanding amounts of external debt servicing on account of the principal amount; the first principal amount is of $761.11 million. The second principal amount of $874.73 million will become due within the next three months. The third principal amount, one of the largest ones to the tune of $1.635 billion would become due within three months period of the current financial year. There is another principal amount of $1.4 billion that would be due in the coming three months. Interestingly, the fifth principal amount of $2 billion would become due without having any interest-related liabilities for repayment.

On interest repayment, the government will have to repay $147.38 million, $189.15 million, $336.53 million, $72.10 million, and $18.16 million in the next three months of the current financial year.

Pakistan has so far received $5.11 billion in shape of total bilateral, and multilateral loans and grants in the first five months of the current fiscal year. Ironically, the government could only muster up $200 million through commercial loans in the first five months out of the total budgeted amount of $7.47 billion. The government envisaged fetching $2 billion through the launch of international bonds but so far it could not bring a penny out of it keeping in view the global scenario and increased markup for the Pakistani currency.

The government could materialise $3 billion through multilateral financial institutions, $602.8 million through bilateral creditors, commercial banks $200 million, IMF $1.16 billion, and Naya Pakistan Certificates $139.28 million in the first five months of the current fiscal year. The government envisaged getting dollar loans and grants to the tune of $22.817 billion for the whole financial year 2022-23.