DNA
ISLAMABAD: Finance Minister Muhammad Aurangzeb has confirmed that Pakistan got a $3 billion rollover from Saudi Arabia after the US declined its request for a $10 billion Liquidity Support Programme.
During a Senate Standing Committee meeting on Finance at the Parliament House on Wednesday, the finance czar said that the country’s external accounts remain in a “comfortable position”, securing $3 billion through the launch of a Eurobond, according to ( DNA News )
With or without $10 billion from the USA, we are in a comfortable position with regard to our external accounts,” Aurangzeb said, replying to a question about Washington’s refusal to entertain Pakistan’s request for $10 billion in support.
Earlier, Washington had ruled out the possibility of $10 billion support to Pakistan. Aurangzeb said it was neither a credit line nor guaranteed, but it was a request made for the Liquidity Support Programme. “If this support is provided, it will be fantastic, but if it does not come through, we can comfortably manage our external account.”
To another question regarding the rollover of $3 billion, which was granted by Saudi Arabia for a few months, the minister replied that it was done by Riyadh but refused to share its duration.
Earlier, the Senate Standing Committee on Finance and Revenues held its meeting under the chairmanship of Senator Saleem Mandviwalla at the Parliament House.
Federal Secretary Finance Imdad Ullah Bosal briefed the Senate panel and said that Pakistan’s gross external financing repayments stood at $21.5 billion, including $17 billion as principal and $4 billion as interest payment. There is an amount of $7.3 billion in the shape of bilateral rollover, said secretary of finance, but he did not share its details.
Sources said that there is $4 billion in SAFE deposits from China, $3 billion from Saudi Arabia and the remaining $300 million from Kuwait.
Saudi Arabia has given deposits of $8 billion, out of which they had granted a $5 billion rollover for a medium-term period till 2028. On the remaining $3 billion, Riyadh has possibly granted a one-year rollover for FY27.
Imdad Ullah Bosal said that, excluding the rollover of $7.3 billion, the remaining external debt repayment stood at $14 billion out of which commercial refinancing stood at $3.2 billion. Pakistan may not opt for securing this commercial refinancing because of its cost.
The finance ministry says that the government had repaid $5 billion so far in five months and only $6 billion will be repaid in the remaining seven months of the current fiscal year. The secretary of finance also apprised the committee that the debt servicing cost had ballooned by 28% in FY23 mainly because of the devaluation of the rupee against the dollar.
The finance minister briefed the committee on the Annual Borrowing Plan, highlighting the projected public debt of Rs86.7 trillion, additional borrowing of Rs6.86 trillion and gross financing requirements of Rs28.65 trillion.
The committee was informed that public debt had declined from 75.1% of GDP in FY2023 to 68.6% in FY2026.
The government also apprised the committee of its efforts to maintain macroeconomic stability, retire short-term debt, improve the debt profile and enhance Pakistan’s credit ratings to secure financing at lower costs.
It was further informed that the country would comfortably meet approximately $5 billion in debt-servicing obligations over the next six months while maintaining foreign exchange reserves of $21.5 billion.
Taking up the difficulties faced by parliamentarians in obtaining foreign exchange for personal travel, the Chairman of Senate Panel, Saleem Mandviwalla, asked the State Bank of Pakistan representative to convey the message to the SBP governor to stop this “nonsense”.
He directed the SBP to review the existing procedures, including Politically Exposed Persons (PEPs)-related clearance requirements and the mandatory personal appearance of parliamentarians before exchange companies despite submission of valid passports, tickets and visas.
