Home Economy News Pakistan debt relief requests won’t include commercial creditors

Pakistan debt relief requests won’t include commercial creditors

by

Pakistan default fears spike on report of UN debt suspension advice By Reuters

Breaking News

‘;

Economy 2 hours ago (Sep 23, 2022 09:06AM ET)

(C) Reuters. FILE PHOTO: A man, displaced because of the floods, wades through flood water to fill the canisters, following rains and floods during the monsoon season in Sehwan, Pakistan September 20, 2022. REUTERS/Stringer/File Photo

(Reuters) -Pakistan’s bonds slumped to just half their face value on Friday after the Financial Times said a United Nations development agency was urging the cash-strapped country to restructure its debt.

Devastating floods engulfed large swathes of Pakistan this month, killing more than 1,500 people and causing damage estimated at $30 billion, fanning fears that Pakistan will not meet its debts.

A memorandum the United Nations Development Programme (UNDP)is set to hand Pakistan’s government this week says its creditors should consider debt relief in the wake of the floods, according to the Financial Times.

The memorandum further proposed debt restructuring or swaps, in which creditors would forego some repayments in exchange for Pakistan’s agreement to invest in climate change-resilient infrastructure, the paper said.

Neither the foreign office in Islamabad or a UNDP spokesperson in Pakistan immediately responded to Reuters’ request for comment on the memorandum. The country’s finance and information ministers could also not be reached.

The bond market reaction on Friday strengthened fears of another default by Pakistan, hammering its international market government debt.

One of the main sovereign bonds due for repayment in 2024 slumped more than 10 cents to about 50 cents on the dollar, while another due in 2027 fell to about 45 cents..

Pakistan’s Finance Minister Miftah Ismail told a Reuters interview earlier this week that there was no chance of a credit default risk.

The government needs to pay $1 billion on bonds maturing in December. It has interest payments worth around $0.6 billion for the 2022-23 fiscal year but the next full bond redemption is not until April 2024.

DEBT RELIEF

Prime Minister Shehbaz Sharif appealed on Friday to the world and rich nations for immediate debt relief, saying what had been done was commendable, but adding, “It’s far from meeting our needs.”

Sharif, who along with Ismail is in New York to attend the U.N. General Assembly, told Bloomberg TV that Pakistan had taken up the debt relief issue with U.N. Secretary General Antonio Guterres and world leaders.

“We have spoken to European leaders and other leaders to help us in Paris club, to get us a moratorium,” he said, referring to rich nation creditors.

Sharif and finance minister Ismail said they had also taken up the relief issue with the International Monetary Fund and the World Bank.

Ismail said the IMF has “almost agreed” to the request for easing the conditions of Pakistan’s $7 billion programme that was resumed in July after being delayed for months.

“They’ve said almost yes,” he told local Pakistani Dunya News TV in New York a day after Sharif met the IMF’s managing director.

The IMF’s representative in Islamabad didn’t respond to a request for comment.

The country of 220 million would not be able to stand on its feet, Sharif added, “unless we get substantial relief”.

He said Pakistan would also seek relief from long-time ally China, to which it owes about 30% of its external debt.

Both Pakistan’s government and Guterres have blamed the flooding on climate change.

Pakistan default fears spike on report of UN debt suspension advice

Canada records C$6.33 billion budget surplus over first four months of 2022/23By Reuters – Sep 23, 2022

OTTAWA – Canada recorded a C$6.33 billion ($4.67 billion) budget surplus for the first four months of the 2022/23 fiscal year, helped by higher tax revenues and the ending of…

Russia’s SWIFT alternative expanding quickly this year, says central bankBy Reuters – Sep 23, 2022

(This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine) By Alexander Marrow KAZAN, Russia (Reuters) – The reach of…

Britain bets all on historic tax cuts and borrowing, investors take frightBy Reuters – Sep 23, 2022

By David Milliken and Andy Bruce LONDON (Reuters) -Britain’s new finance minister Kwasi Kwarteng unleashed historic tax cuts and huge increases in borrowing on Friday in an…

Our Apps



Terms And Conditions
Privacy Policy
Risk Warning

(C) 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News