Following the country’s terrible floods and subsequent official warnings that some debt payments may need to be stopped, investment firm JPMorgan has deemed the decline in Pakistan’s bonds to just a third of their face value justifiable.
Even though Pakistan’s finances were already tight before this month’s floods, the cost of fixing the damage and helping the afflicted people has stoked worries that the country may now go into default.
New Finance Minister Ishaq Dar told Reuters last week that he would ask for payments on some $27 billion worth of non-Paris Club debt largely owed to China to be pushed back, although he would not pursue actual write-offs.
