Finance Minister Ishaq Dar on Saturday said Pakistan will not default and would meet its upcoming $1 billion dollar bond payments.
The finance minister was addressing a press conference via video link from Islamabad. He said that there were rumours that the country would not be able to pay $1bn on December 5 against the maturity of five-year sukuk, or Islamic bonds.
“We have never defaulted before. We will not even be close to default … Let me clear this categorically that the bond will be paid and there is no delay in this and even arrangements have been made in principal for upcoming payments in the next year,” he said.
Dar said that no one should worry about the rumours, claiming they were being spread seemingly for political purposes. “This is highly irresponsible behaviour,” he added.
Dar said that another rumour was spread about Pakistan’s credit default swap. “Our international bonds have very small transactions … and technically there should be no impact on them,” he added.
The finance minister said that people should desist from speculation about increased risk, saying that such “irresponsible statements” would hurt the country and should be avoided.
He said there was another rumour spread about fuel reserves depleting in the next few days. “There is nothing like this. The reserves are present at the level they should be and there is no need for worry,” Dar explained, once again calling for rumours to be avoided.
Regarding the current account deficit, Dar said it was under strict watch and being monitored and managed for the national interest. He said it was $316 million in September and was expected to be below $400m in October.
“If this continues at the same pace then it will be around $5-6bn for the year [while] the projected was $12bn,” the finance minister said.
He once again said that the country came prior to any political affiliation and requested people to avoid rumours about the economy and issue statements with responsibility.
“Your statements have an effect and as a result queries come.”
He reiterated that everything was in order and that bond payments would be made on time in the first week of December.
The PTI has recently raised alarms about the economic situation and alleged that the government is not able to control it.
“Businesses are in deep crises & politicians/media have not highlighted this enough. Industry incurred heavy losses in the last six months due to exchange rate volatility and massive power rate hike and slowdown. Most financial gains made during PTI time have been reversed,” PTI leader Hammad Azhar tweeted today.
A day ago, PTI Chairman Imran Khan also raised concerns about the country’s default risk.
“As I had predicted six months back that the regime change conspiracy would throw our economy into tailspin destroying our capability to service our debts,” he tweeted.
However, Minister of State for Finance and Revenue Aisha Ghaus Pasha assured the nation on Friday that the country was not facing any danger of default.
The minister held out the assurance in the National Assembly when the PPP’s Mussarat Rafiq Mahesar put a direct question to her, “If Pakistan is going to default?”
“Alhamdulillah [Thank God], there is no such possibility. Yes, we were worried when we took over the government [in April] because at that time the IMF (International Monetary Fund) programme was suspended and the avenues of getting external finances were closed for us,” the minister had said.
She added that the situation had improved a lot after the government took some “very difficult decisions” and the revival of the IMF programme.
Pasha had said it was a fact that the country in the past was unable to borrow money from other multilateral and bilateral agencies, and even commercial markets, to finance its external needs due to the suspension of the IMF programme.
However, she pointed out, that after the successful seventh and eighth reviews of the IMF programme, there was no immediate threat of Pakistan going to default. Instead, she claimed, the country’s exports had improved, foreign remittances were coming and foreign direct investment was getting better.
Published in goodnewsetc, November 19th, 2022