Prime Minister Shehbaz Sharif on Friday wrote a letter to China with a request of debt reprofiling for Pakistan to secure the IMF’s approval for a $7 billion economic bailout by next month.
According to reports, Pakistan had sought the reprofiling of more than $27 billion in debt and liabilities with friendly countries including China, Saudi Arabia and UAE to secure a 37-month IMF bailout package.
“I have written a letter to China, it’s a matter of public domain now, for [debt] reprofiling,” said the prime minister while chairing a cabinet meeting on Friday.
The World Bank defines the debt reprofiling as “modifications of the aggregate schedule of future country repayments through refinancing, debt substitution, or renegotiations.”
The process can help a country to mitigate the currency risk that often exacerbates debt sustainability issues.
The prime minister also lauded the friendly ties with China. “Nobody was ready to invest in our energy sector at the time, but China stepped in and began CPEC, it was the only country to intervene,” said the prime minister, while commending the role of China in developing Pakistan’s infrastructure.
