Pakistan's default risk soars amid political turmoil

by IANS |

Karachi, Nov 17 (IANS) Pakistans default risk as measured by five-year credit-default swaps (CDS), insurance contracts that protect an investor against a default, rose sharply amid political turmoil and uncertainty about talks with the International Monetary Fund (IMF).

The CDS soared to 75.5 per cent on Wednesday from 56.2pc a day ago, Dawn news reported citing data provided by research firm Arif Habib Limited.

Official sources in Washington said last week the schedule for talks between Pakistan and the IMF had been readjusted, but the negotiations are continuing.

Media reports, however, claimed that the talks that were scheduled to begin in early November had been postponed until the third week of this month.

According to these reports, the talks would resume after Pakistan fulfilled its pledge to adjust sales tax on petroleum products and took other measures required under a loan agreement revived earlier this year.

But official sources told Dawn news said the talks were rescheduled after last month's release of a World Bank report on flood damages in Pakistan.

Pakistan is scheduled to pay $1 billion on December 5 against the maturity of five-year sukuk, or Islamic bonds.

Finance Minister Ishaq Dar has repeatedly assured for sukuk payment, but the international market is not ready to rely on assurances as the country's economy struggles to avoid default by borrowing more from the markets, donors, commercial banks and friendly countries, Dawn reported.

The day-to-day increase in the CDS reflects a grave situation, making it increasingly difficult for the government to raise foreign exchange from markets either through bonds or commercial borrowings.

The country requires $32 billion to $34 billion this fiscal year to meet its foreign obligations.

Financial experts said the country still needed about $23 billion through the remaining fiscal year.

Latest News
25 students take ill due to stale food in Andhra school Sat, Nov 26, 2022, 12:53 PM
Cop, his friend molest woman in Delhi Sat, Nov 26, 2022, 12:53 PM
Aaftab to be produced in court today, police likely to seek extension of his custody Sat, Nov 26, 2022, 12:52 PM
Centre led by PM Modi involved in K'taka voters'ID scam: Cong Sat, Nov 26, 2022, 12:51 PM
Ex-Cong MLA booked for abusing, manhandling Delhi Police cop Sat, Nov 26, 2022, 12:47 PM
MCD Polls: Nadda launches scathing attack on AAP Sat, Nov 26, 2022, 12:46 PM
K'taka to set up help centres at all PU science colleges Sat, Nov 26, 2022, 12:30 PM
Bengali little magazines get their first organised platform Sat, Nov 26, 2022, 12:29 PM
K'taka AAP unit to celebrate party's Foundation Day on Nov 26 Sat, Nov 26, 2022, 12:29 PM
Bihar Shocker: Man's tongue cut off after murder Sat, Nov 26, 2022, 12:28 PM
PM to participate in Constitution Day celebrations at SC Fri, Nov 25, 2022, 04:33 PM
IND v NZ, 1st ODI: Latham took the game away from us in the 40th over, admits Dhawan Fri, Nov 25, 2022, 04:32 PM
WhatsApp working on voice status updates on iOS beta Fri, Nov 25, 2022, 04:31 PM
Karnataka temple management seeks security after threat from Islamic outfit Fri, Nov 25, 2022, 04:30 PM
VMware posts $3.2 bn in revenue in Q3 amid acquisition by Broadcom Fri, Nov 25, 2022, 04:05 PM