Why Pakistan’s borrowing options shrinking?
Following the international credit rating agencies’ downgrading of Pakistan’s outlook to negative and debt rating to junk status, experts examined Pakistan’s restricted borrowing alternatives on Saturday’s episode of The Review.
According to host Shahbaz Rana, the circumstance has increased the cost of borrowing for the nation and has all but eliminated the possibility of floating Eurobonds. Prior to the $1 billion Sukuk repayment on December 5, the renowned economist claimed that Pakistan’s foreign exchange reserves fell below $8 billion. He added that having an IMF mission in Islamabad had become crucial in calming the nation’s frayed nerves.
According to Rana, the administration has projected that loans from multilateral organisations will total $7.7 billion for the current fiscal year. He continued, saying that $2.3 billion, or 30%, had been spent in just four months. He indicated that the interest rates demanded by international commercial banks were likewise roughly 40% to 50% higher than what the nation was paying.
The World Bank’s almost $1.1 billion budget support loan is in limbo, the anchorperson said, adding that Pakistan claims to have completed the requirements for a $450 million loan but that the date for the World Bank board meeting has not yet been set.
Rana added that the government had asked all parties last week to finish any outstanding tasks impeding the implementation of the $900 million settlement agreement in the Reko Diq case by December 15.
Why Pakistan’s borrowing options shrinking?
He brought up the Economist, Technical, Commerce & Trade, and Information Group’s ongoing strike as well, stating that the workers had protested in front of the finance ministry over the issuance of a discriminatory notification that primarily favoured the all-powerful Pakistan Administrative Services. Their ministries’ operations have been severely hampered by the strike for a few days.
