Pakistan dollar bonds jump after parliament approves revised budget

A foreign currency dealer counts US dollars at a shop in Karachi on May 19, 2022. (AFP/File)
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Updated 26 June 2023
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Pakistan dollar bonds jump after parliament approves revised budget

  • Shorter-dated securities saw biggest gains with 2024 bond adding more than 3 cents before retracing some gains
  • The Pakistani government revised the budget in a last-ditch effort to revive a $6.5 billion IMF bailout program

LONDON: Pakistan’s sovereign dollar-denominated bonds jumped on Monday after its parliament approved a revised budget in a last ditch bid to clinch a deal with the International Monetary Fund (IMF). 

Shorter-dated securities saw the biggest gains with the 2024 bond adding more than 3 cents before retracing some of the gains, Tradeweb data showed. However, they are still at deeply distressed levels of just under 53 cents. 

There are four days to go before a $6.5 billion Extended Fund Facility (EFF), agreed in 2019, expires on June 30. The IMF has to review whether to release a $1.1 billion tranche pending to Pakistan that has been stalled since November. 

Saturday’s budget review came a day after Prime Minister Shehbaz Sharif met IMF Managing Director Kristalina Georgieva on the sidelines of the Global Financing Summit in Paris. 

The IMF made clear that it was unhappy with the budget Pakistan presented earlier in the month, saying it failed to broaden the tax base in a progressive way and undercut resources needed for vulnerable people. 

The funding is key to Pakistan as it faces an acute balance of payment crisis, which analysts say could spiral into a debt default if the IMF funds do not come through. 

The central bank barely has enough foreign exchange reserves to cover one month of even controlled imports, its currency has lost more than 25 percent against the US dollar since the beginning of the year and the economic meltdown is driving more of its citizens to try risky migration routes to Europe. 


Former spy chief Faiz Hameed appeals conviction by Pakistan military court

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Former spy chief Faiz Hameed appeals conviction by Pakistan military court

  • The ex-ISI chief was sentenced to 14 years in prison over engagement in political activities, misuse of authority
  • His conviction is highly unusual in a country where the military has ruled for almost half of its 78-year history

ISLAMABAD: Pakistan’s former intelligence chief Lt. Gen. (retired) Faiz Hameed has appealed his sentencing to 14 years in prison by a Pakistani military court, Hameed’s lawyer said on Sunday. 

Hameed was arrested in Aug. 2024 amid accusations he was involved in land grabbing and coercive seizures of property belonging to the owner of the Top City housing development near Islamabad. At the time, the military said multiple violations of the Pakistan Army Act after his retirement had also been established, prompting court martial proceedings.

On Dec. 11, Pakistan’s military announced that Hameed was found guilty of engaging in political activities, violating the Official Secrets Act and misusing authority and government resources as the chief of the Inter-Services Intelligence (ISI) agency.

“We have filed an appeal against the sentence handed down to Lt. Gen. Faiz Hameed by the military courts. The appeal was submitted to the Registrar Court of Appeals, AG Branch, Chief of Army Staff,” Hameed’s counsel Mian Ali Ashfaq told Arab News, without providing further details.

Hameed served as the ISI director-general from 2019 to 2021. His conviction is highly unusual in a country where the military has ruled for almost half of its history and continues to exert significant influence during civilian rule.

The Inter-Services Public Relations (ISPR), the military’s media wing, had said that Hameed was tried on four charges relating to political interference, breaches of the Official Secrets Act, misuse of authority and causing “wrongful loss to persons.”

“After lengthy and laborious legal proceedings, accused has been found guilty on all charges and sentenced to 14 years rigorous imprisonment by the Court which has been promulgated on 11 December 2025,” the ISPR said on Dec. 11.

Hameed was widely seen as close to Imran Khan when he was the prime minister and after his removal in a no-trust vote in 2022.

The military had previously accused Hameed of helping engineer political unrest during violent clashes on May 9, 2023, when Khan supporters rioted nationwide after his brief arrest on graft charges. Protesters were accused of torching government and military buildings “at the behest of and in collusion with vested political interests.” Khan, jailed since August 2023 on charges he says are politically motivated, denies ordering the attacks.

In its Dec. 11 statement, the military said the trial against Hameed complied with all legal requirements, adding that the former spy chief was given full rights, including the ability to choose his defense team, and retained the right to appeal “at the relevant forum.”

The ISPR also said his alleged role in “fomenting vested political agitation and instability in cahoots with political elements” was being handled separately, leading to speculation about more inquiries and legal cases.

Hameed, who retired in Dec. 2022, has long been a polarizing figure. The ruling Pakistan Muslim League-Nawaz (PML-N) also accuses him of helping engineer the 2017 removal of former premier Nawaz Sharif through court cases. Hameed denied the allegations.

“This is a landmark decision and I think the rule of law and accountability mechanism has been strengthened,” Information Minister Attaullah Tarar, who belongs to the PMLN-N, had told a Pakistani broadcaster after the announcement of the verdict against Hameed.