ISLAMABAD (National Times)- Federal Minister for Finance and Revenue Ishaq Dar Sunday announced that $50,000 pending payments of letters of credit (LCs) will be cleared during the week.

Addressing a press conference, Dar revealed that the decision to provide relief has been taken after consultations with the State Bank of Pakistan (SBP) Governor Jameel Ahmed.

The finance minister said that next month, before leaving for Washington to meet the International Monetary Fund (IMF) officials, the SBP chief will pass on these instructions to clear LCs as a “first step” towards growth.

He revealed that a total of 7,952 cases were pending and after these decisions, nearly 4,400 requests of opening LCs —a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods — will be subtracted.

Regarding Moody’s decision to downgrade the Government of Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa1 from B3, Dar said the ministry has submitted a detailed reply to the report and has addressed all reservations highlighted by the rating agency.

“The major reason behind this negative outlook was the speculations that Pakistan was planning to seek help from bilateral Paris Club creditors,” he said, adding that they thought that Islamabad was aiming to get its loans from World Bank, the Asian Development Bank, etc rescheduled.

The finance chief reiterated that after consultations with Prime Minister Shehbaz Sharif, it has been decided that Pakistan will not seek assistance from the Paris Club.