Minister says debt rollover assurances secured from three countries

ISLAMABAD: Contrary to Pakistan’s request for granting rollover in deposits of $12 billion for three to five years, the three largest bilateral partners, the Kingdom of Saudi Arabia, China and UAE have given confirmations for a year to clinch approval of the IMF programme.

“The IMF has also assessed an external financing gap of $3-5 billion, and Pakistan will have to fulfil this manageable gap over 37 months to secure Fund’s Executive Board for bailout package of $7 billion under Extended Fund Facility,” Minister for Finance Mohammad Aurangzeb disclosed Tuesday. “There are assurances IMF’s Executive Board might consider approval of $7 billion EFF package by end of August 2024 or maximum few days later in early September,” the Minister for Finance told journalists after attending the Senate Standing Committee on Finance meeting.

The Senate panel met under the chairmanship of Saleem Mandviwalla. They sought an in-camera briefing from Chairman FBR Amjad Zubair Tiwana to ascertain reasons regarding the placement of senior FBR officers in the administrative pool. Minister for Finance said three bilateral partners have given assurances for the rollover of deposits of $12 billion for one year, as it might pave the way for getting approval for the next EFF package from the IMF Executive Board. He said they were still managing to get assurances of $3-$5 billion for moving towards the finishing line of IMF programme. He said the government has appointed a consultant to launch Panda bond, and the transaction would be materialised within the ongoing year.

He said the government was considering the appointment of a Chinese consultant to secure IPPs debt owed by Chinese companies and banks. They were expecting positive developments for establishing a joint working group in the next few days. “Pakistan wants extension repayment tenure of Chinese IPPs for three to five years to the tune of $9 billion,” the minister said. He said international commercial banks were interested in Pakistan but wanted to get favourable pricing. They are waiting for approval from the IMF on bailout package and improvement from the credit rating agencies, he said.

Earlier, during the Senate panel proceedings, Aurangzeb said international rating agencies on account of the country’s ratings and SBP brought down interest rates on the lower side to bring some sigh of relief in the wake of higher taxation and energy costs. Now, this macroeconomic stability requires permanence. He said the SBP cleared a backlog of foreign investors for repatriating their dividends till June 30, 2024.

It would help lure foreign investment in Pakistan, he hoped. He said the government was undertaking the right sizing in five selected ministries.

The chairman FBR told the committee the Senate has approved 96 budgetary recommendations, out of which 50 were implemented fully or partially and 36 were rejected by the government. Senator Farooq H Naek raised questions about the government’s move to slap taxes on pencil and stationery items but exempted newsprint.

The SBP requested an in-camera meeting to discuss measures to prevent money laundering related to solar panel imports. Concerns were raised about the potential misuse of suspicious transaction reports, with approximately 1,600 reported this year.