Jittery markets.

STATE BANK governor Jameel Ahmad's assertion that the country has enough dollars to meet its foreign debt obligations may be calming for the uninitiated but not for the nation's creditors and markets. With SBP reserves below $8bn, his words hardly inspire confidence, even if the chances of Pakistan defaulting on its maturing loans are few at the moment. That Pakistan's perceived risk of sovereign default has spiked to a multi-year high due to the worsening dollar crunch shows that the jittery creditors and markets need more than words to shed their worries. The country's credit default swap, an indicator used to insure against debt restructuring or default, has widened to 64.2pc from 52pc at the beginning of November, reflecting dwindling investor confidence in Pakistan's ability to pay back its bond-holders of $1bn Sukuk maturing next month.

Separately, Finance Minister Ishaq Dar, who was in Dubai to meet international bankers for securing a rollover of the commercial debt, re-emphasised his infatuation with a strong home currency as he blamed the weak rupee and external-sector troubles on the market-based exchange rate. Both the minister and SBP believe that the rupee's real worth is below 200 a dollar. That may be so, given that September's real effective exchange rate was computed to be 90.90. If the exchange rate continues to hover much above the rupee's 'actual worth' in spite of this, it is primarily because we are almost dollar illiquid. Had the bank not imposed stringent import curbs at the expense of economic activity, delayed profit repatriation, and not restricted other legitimate dollar payments, its...