Pakistan secures $3bn at 1pc

[Jungibaaz]

A loan at 1% interest is considered 'free money?

Patwari logic?

Turkey just issued a new on the run 10Y bond at 9.75%. Pakistan used to issue debt, but is way too risky, even a speculative pricing quote at 10Y would be around 25% I’d guess - not that anyone would buy, or any investment bank would underwrite.

The US government is borrowing at 3.5% (current US 10Y yield). They are rated AAA, they print the world’s reserve currency and their debt IS money.

Global inflation trended at 8.8% in 2022 and will be 6.5% this year (according to the IMF’s WEO).

So at 1% it’s even better than free money. They would literally be paying us to take cash.

 

[blain2]

Any loan on interest even as low as 1% is bad, what if you can't pay, interest doubles down.

Isn't this realization a tad bit too late? We have been loaning money for decades now. Including through Islamic Development Bank.

Loans are good economic policies according to paid patwari trolls.


A loan at 1% interest is considered 'free money?

Patwari logic?

Do you have a better option? 1% is certainly better than 3 or 4% or even higher.

Also cut out the silly name calling.

 

[epebble]

A loan at 1% interest is considered 'free money?

I have no need for $3 Billion. But if I were offered one, I will take it in a heartbeat. I will ask them to wire it into U.S. Treasury that is giving 3.5% on 10-year bonds. I will use the 2.5%, which is a cool $75 million a year and enjoy a jet set life. First order of business, get a twinjet Gulfstream, a 75-foot yacht and couple of homes in nice places like Switzerland or Monaco.

 

[UKBengali]

So at 1% it’s even better than free money. They would literally be paying us to take cash.

All that matters is that the interest rate is below inflation in US and that Pakistan has sufficient dollar reserves to pay back the money.

 

[Thəorətic Muslim]

FTA should be made to improve both side of the agreement.

Yes, but it's not up to China to come to Pakistan to find basmati rice to sell in Shenchen.

Just like it's not up to them to figure out the logistics to import crap from Pakistan with each individual being a bigger pain in the a$$ than the prior.

Ask me how I know about the last line.

 

[Bilal Khan (Quwa)]

You can give Pakistan a loan at negative 100%, and we'll still figure out a way to go into debt.

 

[PakFactor]

You can give Pakistan a loan at negative 100%, and we'll still figure out a way to go into debt.

I'm finding it very hard to disagree with you.
The problem isn't about getting the money; it's the utilization and Return on Investment. So far, we have an abysmal record.

 

[epebble]

I'm finding it very hard to disagree with you.
The problem isn't about getting the money; it's the utilization and Return on Investment. So far, we have an abysmal record.

Your comment is shockingly accurate. In https://www.dawn.com/news/1731553/debt-repayment-problem

Dr. Miftah Ismail, former Finance Minister, writes:

To understand how we got to this predicament, let’s back up a bit. When Pakistan became part of the war against Al Qaeda and their Afghan Taliban protectors, much of our external debt owed to the West was written off. So we were left with considerably reduced debt repayments and our foreign exchange requirements shrank.

So, in just 20 years, Pakistan again became a basket case. It just shows that, as currently constituted, there is some fundamental flaw in the ability of state to survive on its own. Any amount of money poured just vanishes into a black hole and the situation will be same 20 years from now in 2043 (or 2063 or 2083).

 

[Solidify]

Isn't this realization a tad bit too late? We have been loaning money for decades now. Including through Islamic Development Bank.


Do you have a better option? 1% is certainly better than 3 or 4% or even higher.

Also cut out the silly name calling.

This is the reason why Pakistanis need to as requirement to make their own products & export them now, otherwise the country will keep getting into this mess on annual basis.

 

[flameboard]

Loans are good economic policies according to paid trolls.


A loan at 1% interest is considered 'free money?

1% is quite high when you consider they could have gone lower to decimals. I’ve seen banks offer people loans rates at 2%. Surely states can get better terms

 

[Dalit]

Loans aren't bad but misusing them is bad.

The thing is, Pakistan won't be able to repay a single loan.

 

[PakFactor]

1% is quite high when you consider they could have gone lower to decimals. I’ve seen banks offer people loans rates at 2%. Surely states can get better terms

1% isn't high and very generous; it's a steal. Unfortunately, African nations aren't as fortunate.

 

[ARMalik]

Beggars begging as per usual. Nothing to see here folks.