Pakistan Will Repay a $1 Billion International Bond on Dec 2: SBP Chief

(CTN News) – Jameel Ahmad, governor of the State Bank of Pakistan (SBP), said on Friday that Pakistan would pay back a $1 billion foreign bond on December 2, three days early.

Given that Pakistan is recuperating from terrible floods that claimed more than 1,700 lives and are now experiencing an economic crisis, there has been rising concern about its capacity to satisfy its commitments to external finance.

According to two analysts, Ahmad said the bond repayment, due on December 5, is $1.08 billion.

To guarantee that the repayment would not impact foreign currency reserves, Ahmad stated that money had been secured from international and bilateral sources. On Tuesday, the Asian Infrastructure Investment Bank was anticipated to provide an immediate infusion of $500 million, he added.

As of November 18, Pakistan’s reserves at the central bank were just $7.8 billion, which is not enough to pay for one month’s worth of imports.

However, Ahmad said that he was optimistic the reserve number would be “far higher” by the end of the financial year in June 2023. Ahmad said reserve levels would rely on the continuous realization of planned inflows and the rollover of loans from friendly nations.

He said at the briefing that he anticipated inflows from foreign lenders to enable timely fulfilment of the needs for external finance. Despite payments of $1.8 billion in November, he emphasized that reserves were steady.

According to the International Monetary Fund (IMF), the early completion of Pakistan’s flood recovery plan is crucial for negotiations and ongoing financial assistance from multilateral and bilateral partners. This was stated earlier this week.

Pakistan is now a part of an IMF bailout programme that it joined in 2019. Even though the nation is fighting a full-blown economic crisis with decades-high inflation and depleted reserves, a fixed date for the ninth review to release much-needed cash is still waiting.

In a surprise action earlier today, the SBP increased its main policy rate by 100 basis points to 16% to prevent persistently rising inflation.

Ishaq Dar, the finance minister, published an allegedly accurate infographic from Bloomberg regarding the likelihood of default in developing countries.

In contrast to a very bogus statistic of 93 percent recently leaked by an unethical local political leader, the outlet had projected Pakistan’s one-year chance of default at a low of 10 percent, according to him.

#Bloomberg pitches Pakistan’s one year probability of default at a low of 10% as opposed to a highly dubious number of 93% circulated by an unscrupulous local political leader a few days ago.

Pakistan will inshaAllah continue to honor its all financial commitments on time! pic.twitter.com/XPbAH7unEh

— Ishaq Dar (@MIshaqDar50) November 25, 2022