Friday, February 3, 2023
News

Pakistan repays $1b bond, dismisses perception of default

   SocialTwist Tell-a-Friend    Print this Page   COMMENT

Karachi | Sunday, 2022 1:45:11 AM IST
Pakistan successfully made a repayment of $1 billion against a matured international Sukuk (Shariah-compliant bond), three days ahead of schedule on Friday, dismissing the perception of its default on the payment, local media reported.

As per the actual schedule, the country was to return the maturing investment in the US dollar-denominated global bond on Monday, The Express Tribune reported.

"Yes, we have made the payment of $1 billion," State Bank of Pakistan (SBP) spokesperson Abid Qamar confirmed to The Express Tribune.

The bank has made the payment to Citigroup, which will transfer the funds onward to the investors.

Earlier, the risk of default measured through a five-year credit default swap (CDS) hit a record high of 123 per cent last month, building strongly on the perception that the country would fail to arrange the payment amid its low foreign exchange reserves, the report said.

CDS is an insurance derivative that covers the risk of default on the repayment. Experts, however, said this was an ill-liquid and low-volume traded derivative. A little trade in CDS had built a wrong perception of default on the repayment.

Finance Minister Ishaq Dar, former Finance Minister Miftah Ismail, and SBP Governor Jameel Ahmad often reiterated Pakistan would not default on any of its international payments and it would make all payments as per schedule.

"It has more than the required foreign currency reserves," Ahmad had said last month.

The perception about Pakistan's likely default formed when Sri Lanka defaulted on its global bond repayments after its reserves diminished earlier this year. The nation faced an acute shortage of medicines, petroleum products, and foods as well as a political crisis.

Comparing Colombo with Islamabad on the repayment capacity, an expert said Pakistan had a small share of 7-8% of its total foreign debt through floating international bonds like Eurobond and Sukuk. The rest of the foreign debt was commercial, multilateral and bilateral which can be and has been rolled over from time-to-time, The Express Tribune reported.

--IANS san/arm

( 344 Words)

2022-12-03-19:56:03 (IANS)

 
  LATEST COMMENTS ()
POST YOUR COMMENT
Comments Not Available
 
POST YOUR COMMENT
 
 
TRENDING TOPICS
 
 
CITY NEWS
MORE CITIES
 
 
 
MORE ASIA NEWS
Pakistan facing balance of payments cris...
Pakistan's forex reserves barely enough ...
US says what China offered to SL for deb...
15th Constitutional amendment has streng...
Pakistan's Kashmir, Gilgit-Baltistan sho...
Pak PM, Army chief reach Peshawar for em...
More...
 
INDIA WORLD ASIA
Kerala's economy posted strong recovery ...
During Cong rule, women waited till dark...
'South group' were given 65% stake in In...
Assam: G20 delegates take river cruise t...
Liquor prohibition commissioner abuses I...
After Backward Communities, YSRCP focuse...
More...    
 
 Top Stories
Difficult to make 2026, long time u... 
Mortal remains of K Viswanath taken... 
China scuttles Pakistan's Neelum Jh... 
J-K: Cracks had appeared in houses ... 
Budget increased by 4 times for tri... 
Agate9 Bistro a multi-cuisine resta... 
"Dated till Eternity": Genelia shar... 
"I learnt editing films, story tell...