ISLAMABAD: The much-hyped Plan B requires Pakistan to ask its bilateral partners for $3 billion in additional deposits if the International Monetary Fund (IMF) standoff continues until June 2023.
If the ninth review not finished, the Q Block (Ministry of Finance) is considering bridge financing from bilateral friends to avoid an external accounts crisis.
The IMF programme expires June 30, 2023. Despite their agreement to complete the ninth review under the $6.5 billion EFF project, the IMF and Pakistan expressed their concerns.
Pakistan may finance its demands with $3-$4 billion through bilateral friends. Top official sources indicated this solution considered and will adopted to prevent default. In the following several months until October or November 2023.
It may be optimistic thinking since friendly countries like Saudi Arabia and the UAE have connected their $2 billion and $1 billion contributions to the staff-level agreement and IMF programme reactivation.
We will want $3 billion from our bilateral friends to implement this deal. An official claimed it would help Islamabad avoid default in the coming months.
China’s Contribution
Finance Minister Ishaq Dar said China would give rollover of $1 billion and $300 million commercial loan re-financing within the month, preventing $2.3 billion from depleting foreign exchange reserves by June 2023.
Dar said on Saturday that Pakistan has repaid $1 billion to China Development Bank and $300 million to the Bank of China before their due dates with the understanding that it will be refinanced as soon as practicable.
He said both Chinese banks agreed to waive penalties. China Development Bank refinanced $1 billion fastest. Pakistan paid down $300 million in commercial loans and expects to be refinanced in four to five days. He said all procedures were completed.
He said Pakistan needed to rollover two $500 million SAFE deposits and renew them within the month.
According to an international rating agency, Pakistan must repay $3.7 billion. SBP foreign exchange reserves would remain unchanged until June 30.
The minister said Shell Pakistan would sell its part to an international investor to continue business in the country.
Employees would stay and no money would leave the country. Shell was separating from energy, thus it was their own decision. “There is nothing to worry about,” he added.
