Pakistan bonds fell to just half them face value on Friday after Financial Times said the representative of the United Nations development the agency called for cash, a country experiencing difficulties with restructuring debt.
Devastating floods covered large areas of country this month, affecting 33 million people and causing damage estimated at $30 billion, and killing more more than 1,500 people, raising fears that the country will not pay its debts.
Both government and UN Secretary-General António Guterres blamed climate change for extreme weather This led to a flood that inundated almost a third of country.
Minister of Finance Miftah Ismail on On September 18, said the country would “absolutely not” default on debt obligations despite catastrophic floods.
Pakistan was able to present the program of the International Monetary Fund (IMF) back on track months later of delay due to hard policy decisions. But the positive mood was short-lived before the catastrophic downpours. hit.
Memorandum of the United Nations Development Program set hand over to Pakistan government This week says his creditors should consider debt relief in commemoration of floods, according to Financial Times.
The memorandum also suggested debt restructuring or exchange, in which creditors will let go of payments in exchange for country’s consent to invest in infrastructure resilient to climate change, the document says.
Foreign office in Islamabad did not immediately respond to Reuters request for comment on memorandum.
Read more: Flood-hit Pakistan should suspend debt redemption, says UN document
Finance and information Ministers could not be reached immediately for comment.
UNDP representative in Pakistan did not respond to a request. for comment.
Friday signals heightened fears of default, blow to the country international government debt.
One of in main sovereign bonds maturing for redemption in 2024 plummeted more than 9 cents to about 50 cents on in a dollar and another due in 2027 fell to about 45 cents.
Prime Minister Shahbaz Sharif addressed world and rich countries for instant debt relieved, saying that what had been done was commendable, but adding: “This is far from meeting our needs.”
In an interview on This was announced on Friday by Prime Minister Shehbaz. Bloomberg TV in New York captured by Pakistan up in debt relief issue with UN Secretary General António Guterres and world leaders.
“We have spoken to European leaders and other leaders to help us in paris club get us moratorium,” he said, referring to creditors from rich countries.
Country of 220 million wouldn’t last on his legs, Shahbaz added”unless we get substantial relief.”
He said Pakistan also seek help from a longtime Chinese ally, to whom it owes about 30 percent of his outer debt.
Both government and Guterres blamed the flood on changing of the climate.