Executive Board of IMF, which is going to be held on February 2, 2022, may also approve $1 billion under the Extended Fund Facility (EFF), in Washington DC.
KARACHI: Pakistan on Tuesday raised $1 billion through 7-year Sukuk Bonds, offering an interest rate of 7.95 per cent, the finance ministry announcement said.
The announcement further said that Investors from Asia, the Middle East, Europe, and the United States show a keen interest in Sukuk bonds. According to the sources the investors offered bids for 2.7 billion, but the government of Pakistan has approved only $1 billion bids after a detailed review.
This was the first transaction under the government’s Trust Certificates Assurance Program.
The issuance comes at a time when Pakistan’s gross foreign reserves have fallen to nearly $17 billion from $19 billion in the past two weeks due to debt repayments.
Sources said international debt markets worldwide had suffered shocks since December due to expected increases in interest rates in the United States and Europe.
“In the current situation, we have got a good deal in this uncertain time,” the source said today.
Pakistan sees foreign funds inflows as critical given that its external account deficit has widened on the back of soaring global commodity prices – in particular oil, which makes up about a third of the country’s payments.
Foreign exchange reserves are also a key buffer to stabilize the rupee. Pakistan only last year adopted a market-based exchange rate, resulting in a sharp depreciation of the rupee.
There is being hoped that the Executive Board Meeting of the International Monetary Fund (IMF), which is going to be held on February 2, 2022, will also approve $1 billion under the Extended Fund Facility (EFF), in Washington DC.
In order to meet conditions of the IMF, the government has successfully managed to get the State Bank (Amendment) Bill 2021 cleared from the Upper House of Parliament — which was the last stumbling block in reviving the stalled programme.
Following the clearance of the bill, all prior conditions of the Fund have now been fulfilled by Pakistan, including approval of the mini-budget and SBP bill.