Tokyo and Islamabad agreed on debt deferral amounting to Japanese yen 40 billion (approximately $370 million) for making fiscal space to fight against Covid-19 in Pakistan.
Noor Ahmed, Secretary, Economic Affairs Division, and Kuninori Matsuda, Ambassador of Japan to Pakistan signed these agreements.
The signing ceremony was witnessed by senior officials of the Japanese Embassy.
In the wake of COVID-19, the G20 countries, together with the Paris Club creditors, announced a Debt Service Suspension Initiative (DSSI) to provide much-needed fiscal space to stressed countries in order to meet their urgent economic and health needs.
This is in line with the G20 Debt Service Suspension Initiative (DSSI) agreed on April 15, 2020 and the memorandum of understanding (MoU) signed between Pakistan and the creditor countries on June 9, 2020, according to an official statement issued by the Japanese embassy on Tuesday.
The government of Pakistan, taking advantage of this initiative, entered into negotiations with 21 creditor countries for debt suspension amounting to $1.6 billion under DSSI Phase-I (April – December 2020).
The government of Pakistan will repay the suspended amount in 4-years starting January 2022.