Pakistan Declines Debt Restructure From Paris Club

Mon Oct 10 2022
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Islamabad: Finance Minister Ishaq Dar has said that Pakistan will not ask Paris Club creditors for debt restructuring. “We have chosen not to go to the Paris Club,” he added during a news conference in Islamabad on Sunday.

Dar said that it had been determined, after discussion with Prime Minister Shehbaz Sharif, that it was not in the best interests of the country to request a restructure. Pakistan will honor its multilateral, international, and bond obligations, rebuffing market concerns that the government may postpone bond maturities.

The minister added that “We will honour all sovereign (debt) commitments” and Pakistan’s potential foreign debt default was brought up by Moody’s new rating despite the current economic unrest and balance of payments crisis.

Moody lowered Pakistan’s Credit Ratings:

Last week, Moody’s lowered Pakistan’s credit rating from B3 to Caa1, which is considered “junk” territory, citing external risks and doubts about Pakistan’s capacity to obtain the necessary finance to satisfy its demands in the coming years.

Dar had earlier stated that Pakistan will satisfy the need to secure close to $35 billion in outside funding for the fiscal year 2022–2023.

After the nation’s already precarious economy was exacerbated by severe floods that his government believes may result in economic losses of up to $30 billion.

Sharif had earlier this month appealed to the Paris Club for a debt moratorium.


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