Markets brace for potential default by Pakistan as $7 bn debt looms

Pak was downgraded deeper into junk by Moody's Investors this week as the country faces its worst economic crisis in decades, with foreign reserves plummeting and inflation soaring to record high

Bondholders are bracing for a potential default by Pakistan as the beleaguered nation faces billions of dollars in debt repayments that it will struggle to make good on without a bailout from the International Monetary Fund or rollovers from bilateral creditors.
 

The nation’s dollar bonds slid to the lowest level since November on Thursday as investors weigh its ability to honor $7 billion of repayments in the coming months, including a Chinese loan of $2 billion due in March, according to Fitch Ratings. The rupee slumped 3.2% to 275 per dollar.

Pakistan was downgraded deeper into junk by Moody’s Investors