Govt stands committed to repay US$ 1.0 billion Eurobond in April 2024
ISLAMABAD ( Web News )
The government stands committed to repay US$ 1.0 billion Eurobond in April 2024, and the launch of 1.5 billion Euro Bond in the international capital market will be considered once feasible.
The government plans to refinance US$ 1.0 billion Chinese foreign commercial bank loan maturing in June 2024.
The bilateral deposits $3 billion Saudi Time deposits and $1 billion China Safe Deposits were rolled over for one year in July 2023 and Dec 2023 respectively.
Bilateral debt rearrangement has also been agreed with Exim Bank of China amounting US$ 1.2 billion each for financial 2023-24 and next fiscal year 2024-25.
Similarly, aim is also to mobilize additional financing from foreign commercial banks; and Government is committed to complete IMF’s Stand-By Arrangement (SBA) program to pave the way for release of much needed foreign funding attacked with economic reforms programs agreed with the financial institutions.
According to Annual Borrowing Plan financial year 2023-24, released by Debt Management Office Finance Division Government of Pakistan as public disclosure requirement imposed by international monetary fund.
Government’s borrowing operations remained smooth during first half of 2023-24. Key borrowing activities that were carried out during this period included the interest expense was around Rs. 4.2 trillion, of which 88 percent was interest on domestic debt. Owing to expenditure rationalization measures taken by government, a federal primary surplus of Rs. 1.5 trillion was posted resulting into a federal fiscal deficit of Rs. 2.7 trillion.
Around 77 percent of the financing of federal fiscal deficit was carried out through domestic sources while 23 percent through external sources. Government retired short-term treasury bills by around Rs. 1 trillion. Gross issuance of fixed rate Pakistan Investment Bonds (PIBs) amounted to Rs. 840 billion against maturity of Rs. 1.2 trillion. Gross issuance of floating rate PIBs amounted to PKR 5.0 trillion against repayment of Rs. 2.0 trillion. Gross issuance of Government Ijara Sukuk (GIS) was Rs. 1.3 trillion whereas there was no maturity against the Shariah compliant instruments.
Government successfully raised Rs. 30 billion from its first ever Ijara Sukuk auction on the PSX. Flows in National Saving Schemes remained subdued. External budgetary disbursements were recorded as US$ 5.4 billion, of which US$ 2.2 billion was received from multilateral sources, US$ 2.7 billion from bilateral development partners and US$ 500 million was recorded as inflow from Naya Pakistan Certificates.
External budgetary repayment during the first half of fiscal year amounted US$ 3.3 billion, US$ 1.0 billion China SAFE deposits and US$ 3.0 billion Saudi deposits were rolled over for one year in July 2023 and Dec 2023 respectively. Bilateral debt rearrangement was carried out with Exim Bank of China amounting US$ 1.2 billion each for FY24 and FY25
In additional to above, government also received US$ 1.2 billion under the IMF’s Stand By Arrangement (SBA) and US$ 1.0 billion bilateral deposit from UAE for balance of payment support.
Starting from January 2024, the government started issuance of 3-year and 5-year Shariah-compliant Sukuk instruments through the Pakistan Stock Exchange PSX. Issuance of similar instruments through SBP have been discontinued. Government will continue to engage with domestic and international investors to improve coordination and information disclosure.
Government will continue to make efforts for development of non-bank sector especially pension funds, insurance companies, and asset management companies and will continue to promote development of Shariah compliant debt market. Government plans to work towards creating an enabling environment for savings through improvements in National Saving Schemes and also make these schemes more cost effective.
The government remains committed to completing actions associated with multilateral program loans, which are in pipeline and are projected to be disbursed during second half of FY24. Government stands committed to repay US$ 1.0 billion Eurobond in April 2024.
Issuance in international capital market will be considered once feasible. The bilateral deposits are expected to be rolled over during Jan-Jun FY24. The government plans to refinance US$ 1.0 billion foreign commercial bank loan maturing in June 2024. Aim is also to mobilize additional financing from foreign commercial banks; and government is committed to complete IMF’s Stand-By Arrangement (SBA) program.