Pakistan Secures Debt Extension Assurances From China, UAE
06 August 2024
Published in: Bloomberg
Pakistan has secured commitments from China, Saudi Arabia and the United Arab Emirates to rollover debt for a year, a boost for the nation as it awaits a final approval for its new $7 billion loan program with the International Monetary Fund.
The amount of rollovers will be the same as last year, Pakistan’s Finance Minister Muhammad Aurangzeb told reporters in Islamabad after a parliamentary committee meeting. Pakistan has $12 billion in bilateral loans that have been extended for the past few years.
The assurances come as the South Asian country goes from one loan program to another with the IMF to keep on track with its debt payments. It has also requested debt relief from China for power plants set up under the Belt and Road Initiative. The nation expects a final approval from the IMF by the end of the current month for its loan program.
Prime Minister Shehbaz Sharif’s government expects to manage a financing gap of as much as $5 billion during the fund’s three-year program, said Aurangzeb. Pakistan is moving in the right direction with a stable currency, he said.
Fitch Ratings increased the nation’s credit rating last week by one notch to CCC+ after it secured an initial approval from the IMF. The finance minister targets to raise the rating to B-, he said.
