Debt restructuring will be ‘very difficult’: ex-SBP chief
Former central bank chief Dr Reza Baqir said on Tuesday debt restructuring for Pakistan will be “very difficult as a process” given that most of its foreign loans are “very hard to restructure”. “All the warning signs are there that the process will be difficult because of the type of debt that dominates on the balance sheet of Pakistan,” said Dr Baqir who stepped down as governor of the State Bank of Pakistan (SBP) last year and is now working as managing director at Alvarez & Marsal, a global consulting firm. His comments, which he made during a podcast, are in the wake of growing chatter about the need for debt restructuring. The country faces dollar-denominated loan repayments of $73 billion in the next three years amid depleting foreign exchange reserves. Dr Baqir said most of the country’s debt constitutes “official debt,” which means Islamabad owes it to either multilateral official partners like the International Monetary Fund and the World Bank or bilateral creditors like governments and their institutions.