Govt seeks four-year extension of debt

June 21, 2014 - 12:46:34 am

ISLAMABAD: The government of Pakistan has proposed to extend by another four years the statutory deadline to retire the Rs2.6trn debt obtained for budget financing.

The move came in the guise of giving more autonomy to the State Bank of Pakistan under a condition imposed by International Monetary Fund (IMF) as part of its $6.7bn three-year bailout package.

According to sources, the government is due to miss the June 30 deadline set to give full autonomy to the central bank. In addition, the bill that has been proposed to amend the SBP law is contrary to what the government has agreed with the IMF, they added.

To go ahead with the plan, the Pakistan Muslim League - Nawaz (PML-N) government requires a waiver from the Washington-based lender, as the bill introduced to amend the SBP Act of 1956 is yet to be cleared by the standing committees of the National Assembly and the Senate.

It will be second waiver as the government is set to miss the  deadline of June 30 to appoint a financial adviser to privatise 26 percent shares of Pakistan International Airlines.