State Bank of Pakistan (SBP) Governor Jameel Ahmad on Friday said the country will repay a $1 billion international bond on December 2, three days before its due date.
\nThere has been growing uncertainty about Pakistan\u2019s ability to meet external financing obligations with the country in the midst of an economic crisis and recovering from devastating floods that killed over 1,700 people.
\nThe bond repayment, which matures on Dec 5, totals $1.08bn, Ahmad told a briefing, according to two analysts who were present.
\nAhmad added that funding was lined up from multilateral and bilateral sources to ensure the repayment would not affect foreign exchange reserves. An immediate inflow of $500 million was expected on Tuesday from the Asian Infrastructure Investment Bank, he said.
\nPakistan\u2019s reserves with the central bank stood at $7.8bn as of November 18, barely enough to cover a month\u2019s imports.
\nAhmad said reserve levels will depend on the continued realisation of expected inflows and rollover of loans from friendly countries, but added he was confident the reserve figure would be \u201cmuch higher\u201d by the end of the financial year in June 2023.
\nHe told the briefing that he expected external financing requirements would be met on time because of inflows from international lenders. He pointed out that, despite payments of $1.8bn in November, reserves remained stable.
\nThe International Monetary Fund (IMF) said earlier this week that Pakistan\u2019s timely finalisation of a recovery plan from devastating floods is essential to support discussions and continued financial support from multilateral and bilateral partners.
\nPakistan is currently in an IMF bailout programme, which it entered in 2019, but a firm date for the ninth review to release much-needed funds is pending even as the country battles a full-blown economic crisis, with decades-high inflation and low reserves.
\nThe SBP earlier today raised its key policy rate by 100 basis points to 16 per cent in an unexpected move to ensure high inflation does not get entrenched.
\nMeanwhile, Finance Minister Ishaq Dar shared a purported infographic from Bloomberg about the estimated default probability in emerging markets.
\nHe said that the outlet had pitched Pakistan\u2019s one-year probability of default at a low of 10pc \u201cas opposed to a highly dubious number of 93pc circulated by an unscrupulous local political leader a few days ago.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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