LONDON – Bonds in cash-strapped Pakistan were hammered after crucial talks between Islamabad failed to unlock much-needed funds aimed at thwarting debt default.
It was learnt that the government’s bonds due for repayment the soonest, in April 2024, plunged around 9 percent and other bonds with extended repayment dates suffered between 2 and 3 cents.
The bonds and other debt securities bear the brunt of failed negotiations as IMF delayed the disbursement of the loan tranche, asking for more time for staff-level negotiations.
For the release of funds, both sides need to reach a staff-level agreement, which then needs a final nod from IMF’s head office.
Earlier today, the country’s finance chief Ishaq Dar said the government has received the Memorandum of Economic and Financial Policies (MEFP) draft from IMF. “Memorandum for Economic and Financial Policies (MEFP) draft has been received from the global lender at 9 am,” the PML-N leader in a press conference.
The worsening economic crisis has put Pakistan’s foreign exchange reserves not enough to cover even three weeks of imports, and inflation soared to 27 percent, the highest in nearly 50 years while local currency plunged to a historic low against the dollar.
