State bank denies bilateral debt restructuring plans

Karachi: State Bank of Pakistan has clarified that it is not considering the restructuring of bilateral debts, as stated by Governor Jameel Ahmed during a briefing for analysts on Monday after the monetary policy announcement.

Analysts who attended the meeting confirmed that the State Bank is not even aware of any plans regarding the restructuring of debt.

This indicates that the government has not worked out such a plan, according to Tahir Abbas, the head of research at Arif Habib Limited.

Finance Minister Ishaq Dar had mentioned on Saturday that the government was exploring the possibility of restructuring its bilateral debt.

However, analysts speculate that the finance minister may have been referring to the rollover and extension of the debt's tenure.

Pakistan currently owes a total of $9 billion to China, Saudi Arabia, and the UAE, with annual rollovers and negotiations taking place with these countries.

It is likely that an extension in the rollover tenure will be pursued, providing the government with some breathing space to avoid default.