Pakistan central bank Governor Jameel Ahmad denied officials were seeking debt restructuring talks as the South Asian country will pay $900 million of sovereign debt in June and expects $2.3 billion of obligations to be rolled over.

The government, which is deadlocked with the International Monetary Fund over a $6.7 billion bailout program, has already paid $400 million of debt earlier this month, Ahmad said at an analyst briefing in Karachi on Monday.

There is no discussion on changing the terms of its debt payments, he said. This contradicts government comments made over the weekend that Prime Minister Shehbaz Sharif’s administration plans to engage in talks on its bilateral debt.

Investors are closely monitoring Pakistan’s debt obligations as the government makes a final effort to revive its IMF program before it expires at the end of June. Pakistan is committed to pay its debt and hopes to secure the IMF loans, Ahmad reiterated.

While Pakistan significantly raised energy prices and taxes to meet the IMF demands, there have been other hurdles to cross. The Washington-based lender wants Pakistan to bridge the external financial gap of $2 billion and create a market-driven exchange rate — demands the government is struggling to meet.

Dollar bonds due April 2024 rose on Tuesday, with the notes indicated at about 57 cents on the dollar. The nation faces about $23 billion of external debt payments for fiscal year 2024, which begins in July, according to the governor. The amount is roughly five times its reserves.

Author: Karl Lester M. Yap and Faseeh Mangi