Another crisis in front of Pakistan trapped in the quagmire of debt, now it is difficult to pay the bond of billions of dollars


Shahbaz Sharif

Seeing the condition of foreign exchange reserves in Pakistan, it is being feared whether it will be able to pay the foreign debt on time. Meanwhile, there has been an unprecedented rise in the sovereign bonds of Pakistan. According to a Geo News report, brokerage firm Arif Habib Limited has tweeted that Pakistan’s sovereign bond yield has increased significantly since December 2021. The firm says the biggest concern is how the $1 billion bonds maturing in July 2022 and $1 billion bonds maturing in December 2022 will pay off on the back of rapidly depleting foreign exchange reserves.

The yield on the bond rose to 25.17 percent

The 10-year Eurobond, which matures on April 15, 2024, has seen its yield rise from 5.13 per cent to 25.17 per cent, the brokerage firm said. The Government of Pakistan is requesting the IMF for help to overcome the current situation. However, the government of Shahbaz Sharif has not taken a decision to end the subsidy given on electricity. This subsidy is being considered as a hindrance in the way of help from the IMF.

Forex reserves fell to $10.2 billion

Pakistan’s foreign exchange reserves fell to $10.2 billion in the week ended May 13, which is enough to pay the import bill for just two months. Samiullah Tariq, head of research at Pak-Kuwait Investment Company, said bond yields are picking up as Pakistan is out of the IMF programme. It is not known how Pakistan will pay off the foreign debt without the IMF programme.

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