‘Restructuring not in nation’s interest’
PAKISTAN will not seek debt restructuring from Paris Club creditor nations, the country’s finance minister Ishaq Dar said last Sunday (9) as he sought to restore market confidence after a credit rating downgrade.
The new rating from Moody’s raised concerns that Pakistan could default on its foreign debt as the country contends with economic turmoil and a balance of payments crisis.
“We have decided not to go to Paris Club,” Dar said, adding that in consultation with prime minister Shehbaz Sharif, it was decided it was not in the nation’s interest to ask for a restructuring.
“We will fulfil all sovereign (debt) commitment,” he said.
Dismissing market rumours that the government might extend maturities for its bonds, Dar told a news conference in Islamabad that Pakistan will fulfil all multilateral, international
and bond obligations. “God willing, we will pay the bonds on time,” said Dar. “We are not extending the bond maturity.”
Pakistan’s Eurobond matures in December this year.
Moody’s last week downgraded Pakistan’s credit rating from B3 into so-called junk territory at Caa1, citing external risks and concerns about Pakistan’s ability to secure financing to meet its needs in the next few years.
Dar has previously said Pakistan will meet the requirement to raise nearly $35bn (£31.4bn) in external financing for the 2022-23 financial year.
Sharif last month appealed to the Paris Club for a debt moratorium after the country’s already struggling economy was hit by devastating floods.