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Friday March 29, 2024

Debt payment to France rescheduled

Pakistan has signed $107 million debt service suspension agreement with France, under the G-20 Debt Service Suspension Initiative (DSSI) framework

By our correspondents
June 28, 2022
An agreement was signed between Federal Secretary for Economic Affairs Division, and Nicolas Galey, the Ambassador of the French Republic to Pakistan, in Islamabad on June 27, 2022. Photo: APP
An agreement was signed between Federal Secretary for Economic Affairs Division, and Nicolas Galey, the Ambassador of the French Republic to Pakistan, in Islamabad on June 27, 2022. Photo: APP

ISLAMABAD: Pakistan Monday signed $107 million debt service suspension agreement with France, under the G-20 Debt Service Suspension Initiative (DSSI) framework.

The amount, initially repayable between July and December 2021, will now be repaid over a period of six years (including one-year grace period) in semi-annual instalments, a statement issued by the Economic Affairs Division said.

The agreement was signed by Mian Asad Hayaud Din, Federal Secretary for Economic Affairs Division, and Nicolas Galey, the Ambassador of the French Republic to Pakistan, in Islamabad.

The government has already signed agreements with the French for suspension of $261 million. “Due to the support extended by the development partners of Pakistan, the G-20 DSSI has provided the fiscal space which was necessary to deal with the urgent health and economic needs of the Islamic Republic of Pakistan,” the statement said.

The total amount of debt that has been suspended and rescheduled so far under the DSSI framework for the period of May 2020 to December 2021 stands at $3.688 billion. Pakistan has already concluded and signed 93 agreements with 21 bilateral creditors for the rescheduling of its debts under the G-20 DSSI framework, amounting to rescheduling of almost $3.150 billion.

The signing of an agreement with the French government brings total to $3.257 billion. Negotiations for remaining agreements to be signed under the G-20 DSSI are ongoing. Earlier this month, the government signed two debt service suspension agreements with Japan and Switzerland for suspension of $197.5 million loans. Of this total amount, $191.60 million was owed to Japanese International Cooperation Agency (JICA) during the period from January to June 2021 and $5.89 million to the Government of the Swiss Confederation during the period from July to December 2021.

Another positive news received on Monday was Pak Rupee (PKR) showing some stability against dollar, as it lost only 46 paisa in the interbank market against the US dollar. The dollar closed at 207.94 against the PKR, gaining 46 paisa compared to the previous close of 207.48. However, in open market, the greenback was down by 50 paisa and was being traded at around Rs208.

In the interbank market, the local unit ended at 207.94 to the dollar, 0.22 per cent down from the previous close of 207.48. “We saw an increased demand for the greenback from importers to make their payments at the end of this fiscal year, while foreign companies also purchased foreign currency to repatriate profits and dividends to their headquarters,” said a currency trader.

According to analysts, the rupee is expected to strengthen further, trading below the 200 per dollar level, if Pakistan and the International Monetary Fund (IMF) reach a staff-level agreement for revival of the bailout package.

Meanwhile, the KSE 100-index of the Pakistan Stock Exchange (PSX) on Monday witnessed bullish trend, gaining 826.78 points, a positive change of 2.01 per cent, closing at 41,878.57 points against 41,051.79 points on the last working day.

A total of 247,901,404 shares were traded during the day compared to the trade of 424,229,317 shares the previous day, whereas the price of shares stood at Rs7.378 billion against Rs12.806 billion on the last trading day.

As many as 333 companies transacted shares in the stock market, 228 of them recorded gain and 90 sustained losses, whereas the share price of 15 companies remained unchanged.