You are here: Home » International » News » Finance
Business Standard

Pakistan says it's shut out of global bond markets with IMF only resort

Pakistan's government is unable to secure funding from the global bond market and commercial banks, making it even more important to secure an agreement with the IMF

Topics
Pakistan  | Pakistan government | Bond markets

Faseeh Mangi | Bloomberg 

Pakistan’s dollar bonds, which reached a record low this month, gained on Friday after the government raised fuel prices, a key benchmark for the IMF to resume its loan program. (Photo: Bloomberg)
Pakistan’s dollar bonds, which reached a record low this month, gained on Friday after the government raised fuel prices, a key benchmark for the IMF to resume its loan program. (Photo: Bloomberg)

Pakistan’s government is unable to secure funding from the global bond market and commercial banks, making it even more important to secure an agreement with the Monetary Fund, Minister Miftah Ismail said.

Pakistan’s dollar bonds, which reached a record low this month, gained on Friday after the government raised fuel prices, a key benchmark for the IMF to resume its loan program. is seeking to secure a staff-level agreement with the fund in June.

“All roads lead to the IMF,” Ismail said Saturday to a virtual conference. “Saudi Arabia and other countries are all ready to give money, but all of them say we need to go to the IMF first.”

Former Prime Minister Imran Khan reduced and froze fuel prices, stalling the $6 billion bailout program. His successor Shehbaz Sharif, who took office in April, banned luxury imports and the central bank raised borrowing costs more than expected this month to deal with all-time high imports.

needs about $36 billion to $37 billion in financing for the fiscal year starting June, said Ismail. An IMF deal would help secure funds from other sources such as the World Bank and friendly nations including China.

Ismail ruled out raising funds from the global bond market and foreign commercial banks that have given short-term loans in the past. The decision was made after the nation is said to have picked banks JPMorgan Chase & Co., Citigroup Inc., Standard Chartered Plc and Credit Suisse Group AG to manage any bond sale.

The financing will help increase its foreign exchange reserves to about $15 billion next fiscal year from about $10 billion. Pakistan faces $3.2 billion in dollar debt due this year, the highest amount in the next decade, according to data compiled by Bloomberg.

Pakistan’s financing needs will be comfortable if the nation secures the IMF program, acting central bank governor Murtaza Syed told investors and analysts last week.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, May 30 2022. 08:25 IST
RECOMMENDED FOR YOU
.