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ISLAMABAD: As the government struggles to secure a bailout from the International Monetary Fund (IMF), the finance ministry revealed that Pakistan has to pay a total of $3.7 billion of debt payments in the May-June period.
“This payment is not a matter of concern for Pakistan,” the finance ministry has clarified. “Pakistan has made arrangements for repayment of the loan,” it further said.
“The country will receive several amounts during this period,” ministry said.
“The government has avoided the default with its efforts,” according to the ministry. “The economy has now been stable and on the path of progress,” finance ministry stated.
Leading credit agency Fitch earlier said that Pakistan has to pay $3.7 billion in debt payments in May.
Hong Kong-based director at Fitch, Krisjanis Krustins said about $700 million of maturities are due in May and another $3 billion in June. In an emailed response to questions, Fitch told Bloomberg that it expects $2.4 billion of deposits and loans from China will be rolled over.
Pakistan, which has been negotiating to restart a $6.5 billion bailout with the IMF for about half a year, is racing to avert a default as the foreign exchange reserves — which currently provide an import cover of nearly one month — come under pressure. The country has secured financing support from countries in the Middle East and China, a key IMF condition. “Our base case is still that Pakistan and the IMF will reach an agreement on the programme review,” Krustins said. But the risks are large and the rating cut in February reflected that a default or debt restructuring is an increasingly real possibility, he added.