Pakistan

Pakistan’s Finance Minister Ishaq Dar said the government will fulfill its external debt commitments including the repayment of a sukuk bond that’s due in the first week of December, Bloomberg News reported. “There is no chance of default. Repayment will be done on time,” he said in a televised message on Saturday, adding that arrangements for debt repayments for next year have been done “in principle.” Dar estimated the country’s current account deficit would be at $6 billion at the end of June 2023, half that of an earlier projection.
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Pakistan will "absolutely not" default on debt obligations despite catastrophic floods, the finance minister said on Sunday, signalling there would be no major deviation from reforms designed to stabilise a struggling economy, Reuters reported. Floods have affected 33 million Pakistanis, inflicted billions of dollars in damage, and killed over 1,500 people - creating concern that Pakistan will not meet debts. "The path to stability was narrow, given the challenging environment, and it has become narrower still," Finance Minister Miftah Ismail told Reuters at his office.
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Pakistan's central bank on Monday held its main policy rate at 15%, the bank said in a statement, adding it would closely watch inflation data and global commodity prices, Reuters reported. "Looking ahead, the MPC (monetary policy committee) intends to remain data-dependent, paying close attention to month-on-month inflation ... as well as global commodity prices and interest rate decisions by major central banks," the State Bank said in a statement.
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Pakistan’s rupee, bonds and stocks are rallying as investors bet the nation will win a bailout from the International Monetary Fund this month and avoid a default, Bloomberg News reported. Dollar bonds due in December were indicated at about 95 cents on the dollar on Tuesday from a low of 85 cents in July, as investors turn more confident the debt will be repaid. The rupee surged 11% this month to 213.87 per dollar as of Monday, the biggest gainer in the world. The benchmark stock index climbed 9%, the top performer in Asia after Sri Lanka.
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Pakistan sees a way out of its current economic crisis without descending into default, thanks to progress on a stalled International Monetary Fund loan as well as spending cuts, Finance Minister Miftah Ismail said, Bloomberg News reported. “With the commodity super cycle and Russia-Ukraine war, oil prices skyrocketing and gas going as high as ever been in history, Pakistan and other emerging countries have been facing the worst crisis,” he said in a phone interview.
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The International Monetary Fund agreed to a bailout of Pakistan, providing a financial lifeline as emerging markets strain under pressure from a global price shock rippling out from the war in Ukraine, the Wall Street Journal reported. The IMF said in a statement late Wednesday it would provide Pakistan with $4 billion over the next year, starting with an initial $1.2 billion, once its board formally approves the agreement worked out with Pakistani officials over weeks of negotiations.
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Pakistan’s central bank raised borrowing costs more than expected to quell Asia’s second-fastest inflation and meet conditions for a loan from the International Monetary Fund, Bloomberg News reported. State Bank of Pakistan lifted the target rate by 125 basis points to 15% on Thursday. The hike aims “to moderate domestic demand, prevent a compounding of inflationary pressures and reduce risks to external stability,” the central bank said in a statement. Inflation, due in part to pent-up demand, high global commodity prices and rising imports, surged to a 13-year high of 21.32% in June.
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Pakistan's Prime Minister Shehbaz Sharif said on Tuesday that the annual budget this week will levy more taxes on real estate, which he termed as a non-productive sector, Reuters reported. The South Asian nation of 220 million people is facing a balance of payment crisis with foreign reserves falling below $10 billion, hardly enough for 45 days of imports, a widening current account and historical fiscal deficit. A fiscal consolidated budget to meet targets given by International Monetary Fund (IMF) will be presented on Friday.
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Pakistan GDP growth will slow to 5% for the upcoming fiscal year beginning on July 1, from 5.9% in the outgoing year, following budgetary tightening aimed at winning International Monetary Fund (IMF) support, the government said on Saturday, Reuters reported. The planning ministry made the estimates ahead of the annual budget to be presented on June 10.
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Pakistan faces $6.4 billion in dollar debt due over the next three years as Prime Minister Shehbaz Sharif’s new government is trying to meet bailout terms set by the International Monetary Fund, Bloomberg News reported. The country, under pressure to keep its economy afloat and avert a sovereign default, needs about $3.16 billion to pay dollar bonds and loans this year, $1.52 billion next year and $1.71 billion in 2024, according to data compiled by Bloomberg.
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