Canada Global (Web News) Ishaq Dar, Pakistan’s finance minister, denied assertions that the country was in risk of default, claiming that the risk was only 10%, not 93% as claimed by Bloomberg.
With the five-year credit default swap (CDS) rising by 30 percentage points in a week to 93% on Monday ahead of the repayment of $1 billion for an international bond maturing early next month, the view of Pakistan’s default risk deteriorated.
A research firm claims that in January 2021, the CDS was 4.2%.
On the other hand, the finance minister posted a phoney infographic from Bloomberg on Friday that purported to show the predicted default probability in emerging markets.
He referred to the statements of PTI Chairman Imran Khan and stated, “Bloomberg pegs Pakistan’s one year probability of default at a low of 10% as opposed to a highly questionable number of 93% published by an unethical local political leader a few days ago.
A portion of local and international specialists as well as bond investors perceived the increase in CDS as a danger to their receivables.
Indicating investors’ lack of confidence in Pakistan’s ability to repay the maturing debt, the yields (rate of return) on the $1 billion international bond (Sukuk), which is due to mature on December 5, 2022, shot up to 120% on Monday from roughly 96% on Friday.
Jameel Ahmad, the governor of the State Bank of Pakistan (SBP), announced earlier today during a conference that Pakistan will pay back a $1 billion international bond on December 2, three days early.