Islamabad: The International Monetary Fund (IMF) faces tough choices on how to deal with Pakistan after the February election and how to assess the country\u2019s debt situation, former central bank governor Reza Baqir said. The country, which is operating under a caretaker government, secured a $3 billion loan programme with the IMF in July that helped pull the cash-strapped nation back from the brink of a sovereign debt default. However, the programme was a nine-month standby arrangement, set to expire this spring. \u201cThe IMF will have to decide whether to pull the plug on Pakistan or not, and by that I mean it will have to decide about its assessment of debt sustainability,\u201d said Baqir, head of sovereign advisory services at Alvarez & Marsal. The Fund labelled Pakistan\u2019s debt as sustainable, but also emphasised the significant and pronounced risks said Baqir, who negotiated Pakistan\u2019s 2019 IMF programme and also worked at the Washington-based lender for almost two decades. \u201cThat\u2019s almost like having it both ways,\u201d he said, adding investors would be watching whether the Fund would continue to label the debt as sustainable or whether it would offer its support on a debt restructuring as part of a new programme should Pakistan\u2019s authorities chose to go down that route. The country\u2019s public external debt stood at just under $100 billion by the end of September 2023, according to central bank data, with China and its lenders being the single largest creditor to the country.<\/p>\n
Pakistan\u2019s shorter-dated bonds are trading at 96 cents, fairly close to par, though longer-dated ones maturing after 2030 stand at just over 60 cents, well below the 70-cent threshold below which debt is seen as distressed. On Thursday, the bonds suffered sharp falls after Pakistan conducted strikes inside Iran amid rising tensions with its neighbour.<\/p>\n","protected":false},"excerpt":{"rendered":"
Islamabad: The International Monetary Fund (IMF) faces tough choices on how to deal with Pakistan after the February election and how to assess the country\u2019s debt situation, former central bank governor Reza Baqir said. The country, which is operating under a caretaker government, secured a $3 billion loan programme with the IMF in July that […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-381588","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-top-news"},"yoast_head":"\n