have plunged to around 33-35 cents on the dollar this month which leaves them at just a third of their face value and broadly in line with other countries seen as at risk of default such El Salvador, Ghana and Ecuador.

`The market is certainly pricing a risk of an external debt restructuring, JPMorgan said, also laying out a `hypothetical` scenario where payments on those international market bonds, also known as Eurobonds, were suspended for two years.

The scenario, which would also see a one-third reduction in bond `coupons`, would result in a cumulative saving of $7.5bn for the government by the end of 2024, JPMorgan said although they also cautioned that China might not be willing to accept the same kind of terms on its loans.

The main concerns revolve around domestic debt though.

Nearly two-thirds of Pakistan`s public debt stock, which is now close to 80 per cent of GDP, is domestic and domestic interest payments account for nearly 90pc of overall interest payments.

Earlier this month the IMF had judged Pakistan`s debt as sustainable with nominal gross public debt forecast to drop from 78.9pc of GDP in the 2022 fiscal year to 60.7pc of GDP in 2027.-ReutersKARACHI: The government on Wednesday raised Rs853 billion less than the auction target of treasury bills but the cut-off yields were slightly reduced.

The State Bank of Pakistan (SBP) reported the cut-off yields for the threeand six-month T-bills were reduced by 2 and 1 basis points to 15.72pc and 15.74pc, respectively.

Sources in the marketsaid there was no chance for change in returns on T-bills particularly when the SBP policy rate was 1(ept unchanged at15pc and the inflation for September was 23pc.

However, the yield on 12-month papers was kept unchanged at 15.75pc.

The auction target was Rs1,100bn and bids of Rs1,791bn were received, indicating higher liquidity available with banks to park in risk-free government papers.