Pakistan Will Not Seek Paris Club Debt Restructuring: Finance Minister – News

Ishaq Dar says Pakistan will honor all multilateral, international and bond obligations



Ishaq Dar earlier said that Pakistan will meet the requirement to raise almost $35 billion in external financing for the fiscal year 2022-23.  — Stock Photo

Ishaq Dar earlier said that Pakistan will meet the requirement to raise almost $35 billion in external financing for the fiscal year 2022-23. — file photo

by Reuters

Published: Sun 9 Oct 2022, 19:04

Pakistan will not seek debt restructuring of Paris Club creditor nations, the country’s finance minister Ishaq Dar said on Sunday, as he sought to restore market confidence after a credit rating downgrade.

Moody’s new rating raised concerns that Pakistan could default on its foreign debt as it grapples with economic turmoil and a balance of payments crisis.

“We have decided not to go to the Paris Club,” Dar said, adding that in consultation with Prime Minister Shehbaz Sharif it was decided that it was not in the nation’s interest to request a restructuring.

“We will honor all sovereign (debt) commitments,” he said.

Dismissing market rumors that the government might extend the maturities of its bonds, Dar told a news conference in Islamabad that Pakistan will honor all multilateral, international and bond obligations.

“God willing, we will pay the bonds on time,” Dar said. “We are not extending the maturity of the bonds.”

Pakistan’s Eurobond matures in December this year.

Last week, Moody’s downgraded Pakistan’s credit rating from B3 to so-called junk territory at Caa1, citing external risks and concerns about Pakistan’s ability to secure the financing required to meet its needs in the coming years.

Dar has previously said that Pakistan will meet the requirement to raise nearly $35 billion in external financing for the 2022-23 fiscal year.

Pakistani Prime Minister Shehbaz Sharif last month appealed to the Paris Club for a debt moratorium after the country’s already-troubled economy was hit by devastating floods that, according to his government, will cause economic losses of up to 30,000 million dollars.

Almost 33 million people have been affected and 7.9 million have been displaced following flooding caused by abnormal monsoon rains. — Reuters

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