According to Muhammad Ishaq Dar, Federal Minister for Finance and Revenue, Pakistan’s one-year probability of nonpayment is as low as 10%, according to Bloomberg.
The finance minister stated in a tweet that the probability of default was 93%, as circulated by a reprobate local political leaders a few days ago.
Ishaq Dar also shared Bloomberg’s Estimated Default Probability in Emerging Markets graph (One-year probability of default). Dear stated that it would be an honour for Pakistan to keep its financial obligations on time.
According to one research firm, the CDS was at 4.2% in January 2021. However, on Friday, the finance minister shared a purported Bloomberg infographic about the estimated default probability in emerging markets.
“Bloomberg pitches Pakistan’s one-year probability of default at a low of 10% as opposed to a highly dubious number of 93% circulated by an unscrupulous local political leader a few days ago. Pakistan will Insha’Allah continue to honour its all financial commitments on time!” he tweeted.
#Bloomberg pitches Pakistan’s one year probability of default at a low of 10% as opposed to a highly dubious number of 93% circulated by an unscrupulous local political leader a few days ago.
Pakistan will inshaAllah continue to honor its all financial commitments on time! pic.twitter.com/XPbAH7unEh
— Ishaq Dar (@MIshaqDar50) November 25, 2022
A group of global and local experts, as well as bond investors, saw the increase in CDS as a threat to their receivables.
Yields (rates of return) on the $1 billion international bond (Sukuk) maturing on December 5, 2022, jumped to 120% on Monday from around 96% on Friday, indicating investors’ lack of confidence in Pakistan’s ability to repay the maturing debt.
Earlier today, SBP Governor Jameel Ahmad told a press conference that Pakistan will repay a $1 billion international bond on December 2, three days before its due date.
There is growing concern about Pakistan’s ability to meet its external financing obligations, despite the country being in the midst of an economic crisis and recovering from devastating floods that killed over 1,700 people.
According to two analysts who were present, the SBP chief told a briefing that the bond repayment, which matures on December 5, totals $1.08 billion.
To read our blog on “SBP reserves fall $134 million to $7.8 billion,” click here
