ISLAMABAD      -   Pakistan has to repay $14.9 billion under public external liabilities and repayment schedule during current fiscal year (FY2019/20), which would keep the country’s foreign exchange reserves under pressure.

According to a staff report released by the International Monetary Fund (IMF), Pakistan would have to repay $721 million to Paris club and $7.44 billion to non-Paris club during this fiscal year. Similarly, the government would repay $2.2 billion multilateral, $2.8 billion as commercial loan, one billion dollars as bond and $757 million to the IMF during FY2019/20. Overall, the country would have to repay $14.9 billion. The authorities have given an undertaking to the IMF that Pakistan had received firm commitments from China, Saudi Arabia and the UAE to keep rolling over their existing loans over the course of the programme.

Among Paris club, Pakistan would repay $307 million to Japan, $131 million to France and $90 million to United States. The overall outstanding debt of Paris club has recorded at $11.26 billion. The IMF programme required Pakistan to bring down the volume of Paris club outstanding loans to $8.88 billion by fiscal year 2022/23. Meanwhile, the government would have to repay $7.44 billion to non-Paris club this year. In this club, Pakistan has to repay $3.4 billion to China, $3 billion to Saudi Arabia and one billion dollars to United Arab Emirates. The overall outstanding debt of non-Paris club is $23.8 billion, which would be brought down to $7.5 billion by the end of IMF programme. The bilateral debt from China will be reduced from $15.155 billion today to $7.946 billion by the programme end.

Pakistan would repay $2.2 billion to the multilateral. The outstanding debt of multilateral is $28 billion, which would be reduced to $21.88 billion by fiscal year 2022-2023 when IMF programme would end. In the current fiscal year, the government would repay $733 million to Islamic Development Bank, $855 million to Asian Development Bank and $472 million to IDA of the World Bank. Similarly, the government would repay $2.76 billion as commercial loans this year. Pakistan would repay $2.2 billion to China, as their commercial loan stood at $6.6 billion.  Commercial component of debt owed to China is to be brought to zero by the programme end.

Pakistan would repay one billion dollars as bonds. The outstanding debt under bonds stood at $7.3 billion. Furthermore, the government would pay $757 million to the IMF this year. The outstanding debt of the Fund has recorded at $5.79 billion. Pakistan would have to reduce IMF outstanding loan to $2.7 billion by the end of IMF programme in fiscal year 2022-23.

Pakistan’s capacity to repay its Fund obligations in a timely manner remains adequate but subject to higher than usual risks. “Risks to Pakistan’s repayment capacity have increased on account of the continued decline in reserves and a delay in the adoption of adjustment policies,” the IMF noted. The IMF said that Pakistan’s net international reserves were significantly negative at around –$16 billion at the end of May 2019. To remove future drains on its reserves, the SBP agreed to gradually scale back its short swap/forward foreign exchange position to $4 billion by the end of the programme from the current $8 billion.