Pakistan repays $9.436 billion in debt service in nine months – Latest News – The Nation
ISLAMABAD – Pakistan has massively repaid $9.436 billion in debt service from external government borrowings in the first nine months (July to March) of the last fiscal year (2021-22) which eroded the country’s foreign exchange reserves. country.
The government paid an amount of 9.436 billion dollars between July and March in debt service for external public borrowings. This includes principal repayment of $8.137 billion and interest payments of $1.299 billion. The $9.436 billion break showed Pakistan paid $4.442 billion to commercial banks, $1.340 billion in bonds, $834 million to the International Monetary Fund (IMF) and repaid $764 million to the Bank. Development Bank (AfDB) in July-March 2021.
According to the official documents of the Ministry of Economic Affairs, Pakistan has repaid 751 million dollars to the World Bank and 464 million dollars to the Islamic Development Bank (IDB (short term). The country paid 490 million dollars to the China, $18 million to Kuwait and $180 million to others in the first nine months of the current fiscal year.
The repayment of the loan and the financing of the current account deficit are the two main reasons for the decline in the country’s foreign exchange reserves. The government continuously contracts foreign loans to build up the country’s foreign exchange reserves. Pakistan made disbursements of $11.935 billion between July and March 2021-22, mostly under loan/grant projects and programs from multilateral and bilateral development partners and financial institutions. The break showed that Pakistan had taken $2.484 billion from foreign commercial banks, $2.440 billion from multilateral development partners, $3 billion in the form of safes, $2 billion pledged in the form of euro- bonds and $1. billion from the international capital market through automatic issues.
Among the multilateral development partners, the following banks emerged as the largest partner in terms of new ASF commitments during the period under review: AfDB with $1,105 million (45% of multilateral partners), the Islamic Development Bank with $1,014 million (USD $762 million short-term and $252 million long-term), the World Bank committed $321 million (13% from multilateral partners).
Of the total commitments agreed in FY 2021-22, $7,525 million (66% of total commitments) were committed by international financial investors in the form of bonds, commercial banks and secured deposits to strengthen foreign exchange reserves and stabilize the exchange rate.
While 17% of commitments were for commodity finance, followed by project finance with $1,275 million. An amount of $600 million has been committed for program financing through the AfDB to broaden and deepen the financial system, improve budget management and ensure sustainability of financing in the energy sector to foster growth in Pakistan.
The composition of disbursements is as follows: (a) US$3,949 million, or 33% of total disbursements, came from multilateral development partners, mainly AfDB, World Bank and IDB; (b) USD 2,623 million, or 22% of total disbursements, came from foreign commercial banks; c) $2,000 million, or 11% of the total disbursement, came from international bondholders; (d) USD 321 million, or 3% of disbursements, came from bilateral development partners, particularly Saudi Arabia, China and the United States; e) USD 3,000 million, or 25% of total disbursements, were recorded in SFD term deposits.
As of March 31, 2022, Pakistan’s total external public debt stood at $88.765 billion.