ISLAMABAD: State Bank of Pakistan (SBP) Governor Jameel Ahmed said in a briefing on Friday that Pakistan will repay the $1 billion international bond on December 2, three days before its due date.
There is growing uncertainty about Pakistan’s ability to meet external financial obligations with the country recovering from an economic crisis and devastating floods that killed more than 1,700 people.
Ahmed told a briefing that bond redemptions, which mature on Dec. 5, total $1.08 billion, according to two analysts who were present.
Ahmad added that funds have been provided through multilateral and bilateral sources to ensure that the payment will not affect foreign exchange reserves. He said that an immediate arrival of $500 million is expected from the Asian Infrastructure Investment Bank on Tuesday next week.
As of November 18, Pakistan’s reserves with the central bank were $7.8 billion, barely enough to cover one month’s imports.
Total liquid foreign #reserves held by the country stood at US$ 13.65 billion as of November 18, 2022. For details: https://t.co/WpSgomnd3v pic.twitter.com/1MqRIFRswl
— SBP (@StateBank_Pak) November 25, 2022
Ahmed said the level of the reserve would depend on expected inflows and continued recovery of loan rollovers from friendly countries, but he believed the reserve figure would be “very high” by the end of the fiscal year in June 2023.
He told the briefing that he expects the external financing requirements to be met in time due to the influx of funds from international lenders. He pointed out that reserves remained stable despite a $1.8 billion payment in November.
The International Monetary Fund (IMF) said earlier this week that the timely finalization of Pakistan’s disaster recovery plan requires dialogue and continued financial support from multilateral and bilateral partners. Is.
Pakistan is currently in the IMF’s bailout program, which it entered in 2019, but pending a firm date for the ninth review to release much-needed funds as it faces decades of high inflation and Fighting a full-blown economic crisis with low reserves. .
The central bank raised its key policy rate by 100 basis points to 16 percent on Friday to ensure that higher inflation does not escalate.
Pakistan will fulfill its financial commitments on time: Dar
Moreover, Finance and Revenue Minister Ishaq Dar also assured that Pakistan will continue to meet all its fiscal commitments on time.
#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.
— Ishaq Dar (@MIshaqDar50) November 25, 2022
Pakistan will inshaAllah continue to honor its all financial commitments on time! pic.twitter.com/XPbAH7unEh
Sharing an infographic from Bloomberg, Dar promoted that the publication reduced Pakistan’s one-year default probability to 10 percent, down from the extreme 93 percent predicted by an unscrupulous local political leader a few days earlier. Suspicious numbers were compared to the spread.
