Cash-Strapped Pakistan To Repay $1 Billion Next Week, 3 Days Before Deadline

Islamabad:On Friday, the head of Pakistan’s central bank said that the country, which is short on cash, would pay back a $1 billion international bond on December 2, three days before its due date.

Sources with knowledge of the situation claim that Jameel Ahmad, Governor of the State Bank of Pakistan (SBP), made this statement during a briefing.

Due to the current economic difficulties, there is concern that Pakistan may default on its external liabilities when the bond repayment of $1.08 billion comes due on December 5.

Ahmad provided specifics regarding the payment, stating that it had been arranged through bilateral and multilateral sources, including an immediate infusion of $500 million from the Asian Infrastructure Investment Bank on Tuesday of next week.

The governor emphasized that the foreign exchange reserves were stable despite payments of USD 1.8 billion in November.On November 18, data revealed that the central bank held USD 7.8 billion, but this is insufficient to cover a month’s worth of imports.

Ahmad, on the other hand, hoped that things would get better and the nation would be in much better shape by the end of the fiscal year in June 2023.

Pakistan’s economy is still in a fragile state, and one of the main concerns is the balance of payments.Inflation that is at an all-time high and difficulties in increasing tax revenues are also major issues.
In an effort to keep prices under control, the SBP has increased its key policy rate by 100 basis points to 16%. However, this will make it even harder for the private sector to get financing.

It is anticipated that political uncertainty will lessen as a result of the appointment, boosting business confidence.

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