Govt shouldn’t seek relief on commercial debt

Habib Bank Ltd CEO Muhammad Aurangzeb said on Saturday Pakistan shouldn’t seek relief on commercial debt after the devastation caused by the nationwide floods. Speaking at a conference organised by the Marketing Association of Pakistan, Mr Aurangzeb said failing to deliver on roughly $9-10 billion of commercial debt will knock the country out of the international capital markets. “We mustn’t touch commercial debt, which makes perfect sense at this point in time in the global context,” he said. Commercial debt consists of funds the sovereign has borrowed from commercial banks or international bondholders. These are different from the loans that Islamabad has acquired from bilateral and multilateral sources like foreign governments and international financial institutions. “Our external debt is $130bn. About 80pc of it is bilateral and multilateral,” he said. According to the State Bank of Pakistan (SBP), the country’s total external debt amounted to $130.2bn at the end of 2021-22. Commercial loans of just a little over $10bn constitute 7.7pc of the country’s total dollar-denominated external debt.