Ex-SBP chief argues against ‘piecemeal’ debt restructuring

Former central bank governor Syed Salim Raza has said Pakistan should avoid going for a “piecemeal restructuring” of its dollar-denominated debt. Speaking at a recent seminar on national economic challenges, the former chief of the State Bank of Pakistan (SBP) said that asking one of the many creditors to restructure the debt was “unfair” and tantamount to subsidising the other creditors. “It’s reasonable that we think of one substantial restructuring,” he said. His advice follows weeks of reporting by the local press on the rising level of credit default swap (CDS), which is a tool that international bondholders use to protect themselves from a possible default by debt-issuing sovereign nations. Last month, Finance Minister Ishaq Dar said Pakistan would seek the rescheduling of some $27 billion non-Paris Club debt that Islamabad owes mainly to China.