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Pakistan Will Borrow $10b to Repay Loans

Pakistan Will Borrow $10b to Repay LoansPakistan Will Borrow $10b to Repay Loans

The government is preparing a roadmap to borrow $10 billion from external sources in next six months to repay previous loans and finance the current account deficit.

“Out of this amount, the government will make payment of around $3.5 billion to International Monetary Fund and others while $6 to 7 billion will be used to finance the trade deficit of the country,” said a top official of the ministry of finance demanding anonymity. He said that the roadmap in this regard would be finalized in next few days, APP reported.

He was of the view that government would approach the commercial banks for borrowing. “The government is in negotiations with some foreign banks and expected to sign more agreements to procure more commercial loans,” he added.

The government had already borrowed $1.1 billion from the commercial banks during five months (July-November) of the current fiscal year. The government had projected only $1 billion borrowing from the commercial banks during entire ongoing financial year. However, the government had crossed the limit in just five months to sustain its foreign exchange reserves.

Pakistan’s foreign exchange reserves are under pressure due to the repayment on previous loans and widening of current account deficit. Pakistan’s overall reserves are around $20 billion. Total payments against external public debt during fiscal year 2017-18 were $6 billion out of which $2.4 billion have already been paid. Therefore, the government has to pay $3.6 billion over the remaining period of the current fiscal year.

 

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