Averting Default, Pakistan Pays $1 Billion Before Schedule: Report

Earlier, the risk of default - measured through a 5-year credit default swap (CDS) - hit a record high of 123 per cent last month.

Cash-strapped Pakistan has averted a default on its repayment of USD 1 billion against a matured international Sukuk (Sharia-compliant bond) three days ahead of schedule on Friday.

The Express Tribune reported on Saturday that as per the actual schedule, the country was to return the maturing investment in the US dollar-denominated global bond on December 5.

"Yes, we have made the payment of USD 1 billion," State Bank of Pakistan (SBP) Spokesperson Abid Qamar told the newspaper. The bank has made the payment to Citigroup which would transfer the funds onward to the investors.

Earlier, the risk of default - measured through a 5-year credit default swap (CDS) - hit a record high of 123 per cent last month, building strongly on the perception that the country would fail to arrange the payment amid its low foreign exchange reserves. CDS is an insurance derivative that covers the risk of default on the repayment.