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ISLAMABAD: With its foreign exchange reserves depleting, Pakistan would require to repay about $8.3 billion in external debt payments during the next three months (January-March) of the current fiscal year.
Pakistan will need to receive a $2 billion rollover from the UAE during the next three months of the current fiscal year to service its $8.3 billion in outstanding debt.
Another $700 million commercial loan repayment to Chinese banks is due, which Pakistani officials hope to be refinanced. The main amount of debt servicing is $5.035 billion in the next three months, while interest repayment is roughly $426.88 million, bringing the total due amount to $5.462 billion.
In January 2023, the government will have to return $600 million in commercial loans, $400 million of which would be paid back to a Dubai-based bank.
Debt servicing payback includes deposits of $2 billion from the UAE, which Islamabad anticipates as a rollover. Pakistan will want a one-year rollover from the UAE authorities.
The government also anticipates $700 million in re-financing from China, although it must first repay the Chinese banks.
Out of the entire sum owed, Islamabad would have to pay back over $2 billion in commercial loans over the next three months, making this liability the largest one remaining.
Within the next three months of the current fiscal year, the principal balance of commercial loans will be $1.635 billion, with interest payments ranging from $336.53 million.
The SBP’s foreign exchange holdings were $6.11 billion on December 22, 2022, down from $10.8 billion in April 2022, when the PDM-led government took over following the ouster of Imran Khan via a vote of no-confidence.
In the upcoming three months (January through March) of the current fiscal year 2022–23, senior government sources revealed to The News on Wednesday that there was still $5.462 billion in overdue debt payments.
The entire amount due has increased to $5.462 billion due to the service of the debt, which will cost $5.035 billion in the next three months and $426.88 million in interest payments.
On account of the principal amount, there are five outstanding amounts of foreign debt servicing; the first principal amount is $761.11 million. Within the following three months, the $874.73 million second principal sum will be due.
Within three months of the end of the current fiscal year, the third main payment, one of the highest at $1.635 billion, would be due. In the next three months, an additional main payment of $1.4 billion would be due. Interestingly, there would be no interest-related obligations to be repaid when the fifth main payment of $2 billion became due.
In the following three months of the current fiscal year, the government will be required to return $147.38 million, $189.15 million, $336.53 million, $72.10 million, and $18.16 million in interest.
In the first five months of the current fiscal year, Pakistan has received a total of $5.11 billion in loans and grants from bilateral, multilateral, and other sources.