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Pakistan

SBP chief says Pakistan not considering bilateral debt restructuring: Reuters

  • Development comes after Finance Minister Ishaq Dar's statement on possibility of restructuring bilateral debt
Published June 12, 2023

KARACHI: State Bank of Pakistan (SBP) governor Jameel Ahmad said the country is not considering a bilateral debt restructuring, sources that attended an analyst briefing following the monetary policy decision told Reuters.

“As of now there is no plan to enter into any debt restructuring,” the sources cited central bank governor Jameel Ahmad as saying.

“Absolutely no doubt about it. We are not considering any such plan, so there is no question of what will be the haircut,” he added.

In his post-budget press conference, Finance Minister Ishaq Dar had said that the government is working on the possibility of restructuring its bilateral debt.

“There is no plan to go to multilateral development institutions, requesting them to reschedule our debt,” he said.

“However, we could negotiate bilateral loans and will talk to our bilateral partners after the budget process is over,” he said.

Dar also ruled out the need to reschedule domestic debt.

“Being a sovereign country, if you cannot meet your own currency requirement of the debt repayment, it is a serious situation.

“Rescheduling domestic debt at present is foolishness, especially at these interest rates. Once the policy rates decline to a reasonable level, then the short-term loans can be converted to the long term,” he said at the press conference on Saturday.

Comments

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Aslam Khan Jun 12, 2023 07:18pm
let's keep politics aside and fix the debt issue. we have no choice but to restructure our loans. If the Oil pipeline stops, it will take 3 weeks to restore it, this will call a major crisis. Get rid of PDM, they have no credibility with in pakistan or outside
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Nauman Ayub Jun 12, 2023 09:50pm
Domestic debt also has to be restructured like what Ghana did.
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Abu Jun 12, 2023 11:20pm
Why governor of SBP and FM Ishaq Dar are not on same page.
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Ash Chak Jun 13, 2023 12:09am
Ishaq Dar’s plan B is essentially an Interest only loan. This was popular in the US before the financial crisis. The plan was to buy a house that the person couldn’t afford , pay only interest and wait for house prices to go up and sell at a higher price. This was an unmitigated disaster for everyone when housing prices collapsed. Dar may want to consult Atif Mian because he wrote a book about it.
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zh Jun 13, 2023 01:18am
@Aslam Khan, Remove PDM - easily said than done. To achieve this, Pakistan will first have to change the core commanders. The generals still need to finish their mismanagement. Rumours say they are scheming to install AZ or his brilliant scion as the next PM.
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Aslam Khan Jun 13, 2023 03:14am
@Abu, because real abu jee gave different direction to SBP
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