Islamabad:
Pakistan respected the state of the International Monetary Fund (IMF) to increase the deadline for its debt by removing the short -term loan and the government also hopes to conclude a foreign commercial loan agreement of $ 1 billion in April.
Development has become warm on a certain improvement in debt indicators, including the expected slowdown in the pace of the accumulation of debts to a single figure after a long period. The debt office, which now comes directly from the finance secretary, has taken certain initiatives to reduce the risks of interest and refinancing of debt.
Against the state of the IMF to increase the debt time of the current average deadline of two years and eight months, the finance division managed to increase it to three years and three months in December, according to data compiled for the IMF exam from Monday.
The first official examination of the program between Pakistan and the IMF will start on March 3 and will continue until March 14. Their successful conclusion will lead to the publication of the second loan section of approximately $ 1.1 billion.
Pakistan’s performance in terms of debt maturity is much better than the 2025 final target set by the IMF. This has reduced the risks of refinancing and interest rate and will also reduce government dependence on commercial banks.
The average deadline for maturity is the weighted average reimbursement period of the existing debt. The IMF highlighted the increase in the maturity period to deal with the risk of rolling.
The objective of maturity has been achieved by moving the composition of the interior debt, which amounts to 49 billions of rupees, to the investment obligations of Pakistan in longer term (GDP) while reducing dependence on short -term cash bills (Bills T), said Eraj Hashmi, director of the debt office.
He said the deliberate move not only attenuated the risks of rolling, but also attracted investors, who sought long -term stable yields, strengthening confidence in the Pakistan debt management strategy.
The Ministry of Finance also tries to guarantee a foreign commercial loan of $ 1 billion at the rear of a credit guarantee of $ 500 million granted by the Asian Development Bank (BAD). Pakistan has not been able to obtain a new foreign commercial loan because of its poor note. As a solution, he will use the ADB warranty.
Sources have indicated that the commercial banks based in London had shown interest and that the conditions were finalized. Among these are standard Charterd and Deutsche Bank. A Chinese bank has also shown interest.
The government has also tried to bring Chinese market debt, but it is a long process and it now hopes to collect up to $ 250 million by next year. Internal evaluation shows that Panda obligations will attract approximately 3.5% interest rate, which is much of 8.5% rate for the issue of Euro-Obstacles.
The finance division managed to restrict the accumulation of debt to a single figure, partly helped by reducing the interest rate. During the last financial year, there was an increase of 8.4 billions of rupees in the stock of the debt, showing an increase of 13.3%.
The assessment of the finance division is that the accumulation of debt will slow down at less than 9% during this financial year and that the net increase will not exceed 6.3 billions of rupees. He sees the public debt drop to 77.5 rummage of rupees by June this year.
During the first half of the current financial year, RS 2.8 Billions had been added to the debt stock at a rate of 3.9%.
The Ministry of Finance said that it would continue to implement the policy of buying debts and that next week, it redeem the GDP. Earlier, he bought 1 Billion of T -Billons rupees, which caused savings of RS31 billion interest, according to the ministry.
This will continue in the second half of this exercise by buying bonds instead of T-Bills.
The ministry said that during the first six months of the current financial year, it withdrew RS1,7 billions of debt, which reduces dependence on commercial banks. The reason was the initial payment of RS 2.5 billions of profits by the central bank.
Consequently, the T -ticket portfolio has decreased RS1.5 Billions, which will have a positive impact on the raw financing needs of next year.
In June of last year, banks held 81% of government titles. Now their assets amounted to 67%.
The Ministry of Finance said that the government had contained an external debt since Prime Minister Shehbaz Sharif took office in March of last year. The total external debt remained stable at 86.6 billion dollars during the period, with effective management of debt and a reluctance to take unnecessary debt, he added.
The story of Pakistan’s debt is no longer a despair but of determination, discipline and decisive action, said Eraj Hashmi. Thanks to strategic reforms, the government has slowed the accumulation of debts, he added.
The government also plans to save 1 billion of rupees due to the reduction in interest rates. Against the allowance of 9.8 rumors of rupees, the cost can oscillate around 8.7 billions of rupees. In the second period, the payment of the estimated interest is RS3.6 Billion, said the Ministry of Finance. During the first half, 5.1 billions of rupees were spent for the payment of interest.
The ministry would undertake the very first auction for public bonds on Monday. This strategy is aligned with international best practices and demonstrates the government’s ability to withdraw the debt before the deadline.
