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Bilateral debt restructuring not under consideration: SBP governor

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2 years ago

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  • SBP Governor Ahmad says restructuring not under consideration.
  • $0.4bn paid out of $3.6bn for this month, says Governor Ahmad.
  • Govt to decide appropriate time to issue Eurobond, governor adds.

KARACHI/ISLAMABAD: State Bank of Pakistan (SBP) Governor Jameel Ahmad clarified Monday that Pakistan was not considering a bilateral debt restructuring that Finance Minister Ishaq Dar had mentioned earlier.

“As of now there is no plan to enter into any debt restructuring. Absolutely no doubt about it. We are not considering any such plan; so there is no question of what will be the haircut,” he said during a briefing to analysts, according to The News.

After presenting the federal budget for FY2024, FinMin Dar said that the government was working on possibly restructuring its bilateral debt regardless of whether it completes its IMF review.

The SBP governor said most of the debt is bilateral and multilateral as they have paid large amounts of commercial debt and will pay Eurobonds when due, said Topline Securities, citing the governor.

The governor said that out of the total external repayment amount of $3.6 billion due this month, $0.4 billion has already been paid. The remaining balance of $2.3 billion will be rolled over, while $0.9 billion needs to be financed.

The total debt requirements for FY2024 will amount to approximately $23 billion, according to the SBP, which will be evenly distributed across four quarters.

In the next monetary policy statement, the SBP will come up with how to fund this depending upon IMF and other factors.

The governor highlighted that discussions are ongoing with IMF and hopeful that the review will conclude soon.

He expected that Rs1 trillion would be transferred to the government due to the profit earned by the SBP after retaining a specific portion during FY2024.

The SBP expects the current account deficit (CAD) for FY2023 will close to $3.5 billion (worst case $4 billion) due to policy induce import restrictions and available liquidity (exports and remittances).

The CAD for FY2024 will also be below $4 billion.

According to Ahmad, the government will decide the appropriate time to issue Eurobond, keeping market fundamentals and credit rating in mind.

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Robust activity lets PSX climb above 115,000 level again.

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5 months ago

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On Friday, the Pakistan Stock Exchange (PSX) resumed its upward trend, crossing 115,000 points once more.

The PSX had strong action in the morning session, as the KSE-100 index increased by 1,000 points to 115,138.

The notoriously volatile PSX closed Thursday at 114,037 points, up 594 points.

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Meanwhile, in the interbank market this morning, the US dollar fell 7 paisas to Rs278.65 against the Pakistani rupee.

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SBP will announce monetary policy on January 27.

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5 months ago

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The State Bank of Pakistan (SBP) will release its monetary policy on Monday.

The Monetary Policy Committee (MPC) of the SBP will convene on the first day of the following week to make decisions on monetary policy.

The Monetary Policy decision will be announced by Governor SBP Jameel Ahmad at a news conference on the same day after the MPC meeting, according to an official release.

In December, the central bank reduced policy rates by 200 basis points (bps) to 13 percent.

“In November 2024, headline inflation fell to 4.9 percent year on year, meeting the MPC’s estimates. This decrease was mostly caused by the ongoing decline in food inflation and the phasing out of the impact of the gas tariff increase in November 2023,” SBP stated in an official release.

“However, the Committee noted that core inflation, at 9.7 percent, is proving to be sticky, while consumer and business inflation expectations remain volatile.” To that end, the Committee restated its previous assessment that inflation may remain volatile in the short term before stabilizing within the target range.

“At the same time, growth prospects have slightly improved, as evidenced by a recent increase in high-frequency indicators of economic activity.” Overall, the Committee concluded that its approach of gradual policy rate decreases is keeping inflationary and external account pressures under control while promoting long-term economic growth.

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Finance Minister Meets With World Leaders at World Economic Forum in Davos

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5 months ago

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During his attendance at the World Economic Forum in Davos, Switzerland, Finance Minister Muhammad Aurangzeb has met with officials of organisations and leaders of many nations.
Bangladesh’s Chief Advisor, Muhammad Younas, met with Mohammad Aurangzeb.
On the fringes of the World Economic Forum’s Annual Meeting 2025 Opening Banquet, there was an informal meeting.
Additionally, the Finance Minister met with Anwar Ibrahim, the Prime Minister of Malaysia.
Both leaders discussed economic cooperation and bilateral ties.
Muhammad Aurangzeb also had a meeting with Dp World’s Rizwan Soomro and Yuvraj Narayan.
They talked about how to strengthen Pakistan’s logistics and infrastructure systems to support trade.
“The Pakistani government is committed to advancing joint projects and values partnerships in both business-to-business and business-to-government cooperation,” the finance minister added.

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