Pakistan pledged to pay its sovereign debt obligations this year as it treads close to a possible default with foreign-exchange reserves covering less than a month of imports.
(Bloomberg) — Pakistan pledged to pay its sovereign debt obligations this year as it treads close to a possible default with foreign-exchange reserves covering less than a month of imports.
“Come what may, we will be paying off all of our anticipated payments this year,” Commerce Minister Syed Naveed Qamar said in an interview in Washington Tuesday. The government will fulfill its international financial obligations, Finance Minister Ishaq Dar said in a statement the same day.
Pakistan is confident of securing an International Monetary Fund bailout “any day now,” Qamar said, which would boost its reserves that stand at $3.2 billion. The nation needs to finance $5.9 billion in debt payments and current-account deficit through June, Bloomberg Economics estimated last month.
Read: Pakistan, Sri Lanka Close in on IMF Deals After Raising Taxes
Pakistan’s dollar bonds are trading in distressed territory, signaling investors are worried about its ability to pay its debt. Pakistan has $8 billion in Eurobond debt due by 2051 with the next payment of $1 billion due in April next year. Most of the nation’s external debt of $92 billion is sourced from concessional multilateral and bilateral sources.
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