By Atiya Riffat
Three United Arab Emirates (UAE) banks have been hired by the government of Pakistan to raise $200 million syndicated loan.
With a one-year maturity,the loan is being managed by Commercial Bank of Dubai, Emirates NBD, and Noor Bank, according to media sources.
Funds are require by Pakistan to balance the diminish in international reserves and as per the International Monetary Fund control the fiscal deficiency which is at 5.5% of gross domestic product this year.
Miftah Ismail Pakistan’s Finance Minister confirmed that to repay the debt Pakistan is taking the loan of $200 million to repay the debt.
“We are raising this money to boost our reserves,” he told Reuters. “As we pay out money to different institutions, we need to rebuild our reserves.”
According to Ismail those in coming weeks the loan may rise to $350m.
“This will change our debt profile but it will not increase our overall debt.” he added.
Economic growth of Pakistan has flow to above 5pc, but many analysts thought the country to see a new IMF bailout this year because of a current account deficiency and a significant diminsh in foreign currency reserves.
The country has been very active in the loan market recently. It raised a $700m 10-year loan last year with a partial guarantee for Reconstruction and Development from the International Bank, a unit of the World Bank.
In January 2018 Pakistan’s total debt increased to 21.8 trillion and it is just increasing. At the end of PML-N’s government, Pakistan’s public debt-to-GDP ratio reaches to 70.1%, which is all-time high during the last 15 years.