Pakistan's borrowing options shrink

Pakistan’s borrowing options have remained limited after the international credit rating agencies downgraded its outlook to negative and debt rating to junk status, experts discussed in talk show The Review on Saturday, the Express Tribune reports.

Anchorperson Shahbaz Rana said that the situation had increased the country’s borrowing cost in addition to virtually closing the doors to floating Eurobonds. The renowned economic expert said that the foreign exchange reserves dropped below $8 billion ahead of the $1 billion Sukuk repayment on December 5, saying having an IMF mission in Islamabad had become very critical in soothing the frayed nerves.

For the current fiscal year, Rana said, the government has estimated the inflow of $7.7 billion in loans from the multilateral agencies. In four months, he added, $2.3 billion, which is 30%, has been disbursed. He revealed that the foreign commercial banks were also demanding an interest rate that was about 40% to 50% more than what the country was paying.

The anchorperson said, “the World Bank’s nearly $1.1 billion budget support loan is hanging in the balance,” adding: “Pakistan claims it has met the conditions for a $450 million loan but no date for a World Bank board meeting has been decided so far.”

Meanwhile, Rana said that the government had last week urged all stakeholders to complete pending actions hampering the conclusion of the $900 million settlement deal in the Reko Diq case by December 15th.

He also took up the issue of ongoing strike of the Economist, Technical, Commerce & Trade and the Information Group, saying the employees had staged a protest in front of the finance ministry for issuing a discriminatory notification that mostly favoured the all-powerful Pakistan Administrative Services. The strike has crippled work in their ministries for the past several days.