Economy’s freefall to a default
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Of the 192 members of the United Nations, Pakistan’s sovereign debt is now the riskiest. For the week ending Aug 29, Government of Pakistan bonds overtook Argentina’s to be the most unsafe for investment.

In London, where Credit Default Swaps (CDS) are traded, the price for insuring $10 million worth of Argentina’s debt stood at $788,000 while the price to insure the Government of Pakistan-guaranteed debt skyrocketed to $950,000 — something that has never happened before — Pakistan’s debt is now the priciest to insure (read: the London market is contemplating a default-like scenario).
Pakistan’s total foreign debt and liabilities have now crossed the $45 billion mark. ‘Pakistan: Could the Political Chaos Lead to Sovereign Default?’ a report by Citibank, asserts “if Pakistan opted to default, it would have to reschedule all of its debts, which amounts to $2.6 billion in self-issued bonds and $13.9 billion in bilateral debt”. The report expects the “Pakistani rupee’s fall to continue in light of government inaction and the break-up of the government coalition”.
Pakistan is teetering on the brink of default. The rupee has lost some 20 per cent of its value over the past quarter and the KSE-100 Index is down a whopping 45 per cent. Pakistan cannot do without the IMF, the Asian Development Bank (ADB), the Islamic Development Bank and another Saudi oil facility.