Pakistan’s finance minister Miftah Ismail sounded a warning of a possible default if its fuel subsidies do not get abolished. He said that the government was giving a subsidy of PKR 19 ($0.09) on petrol and PKR 53 ($0.26) on diesel whilst referring to Sri Lanka also doing the same before it culminated with a default. He also added that the IMF insisted that the nation remove the subsidies so that it can pave the way for the multilateral lender to resume its $3bn loan program to the nation. Pakistan’s foreign reserves stand at less than $10bn, sufficient to cover only 45 days of imports, while it has $6.4bn in dollar debt due over the next three years – $3.16bn are in the form of dollar bonds and loans in 2022, $1.52bn in 2023 and $1.71bn in 2024.
Pakistan’s dollar bonds are trading weaker with its 8.25% 2025s down 0.4 points to 72.1 cents on the dollar.
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