Pakistan’s troubles justify slump in bond prices: JPMorgan

Investment bank JPMorgan has called the slump in Pakistan’s bonds to just a third of their face value justified, following the country’s devastating floods and recent warnings by officials that some debt payments may need to be suspended. Finances were already strained before this month’s floods, but the cost of repairing the damage and providing support for those affected have raised fears that the country may now default. Finance Minister Ishaq Dar told Reuters last week that he would ask for payments on some $27 billion worth of non-Paris Club debt largely owed to China to be pushed back, although he would not pursue actual write-offs. Pakistan is in an International Monetary Fund (IMF) programme and set to receive around $4 billion in post-flood aid and loans from the likes of the World Bank and United Nations.