ISLAMABAD: Pakistan has issued Euro bonds worth Rs1 billion in the international market, Finance Ministry officials said Wednesday.
The country received $300 million by selling five-year bonds, $400 million through 10-year bonds and $300 million via 30-year bonds.
It will give 5.87%, 7.12% and 8.45% interest on these bonds respectively, the officials said.
International investors earlier this week offered Pakistan to float bonds worth $3 billion in the international market.
Islamabad, however, chose to release $1 billion bonds for now. In March, Pakistan achieved the target of selling Euro bonds worth $2.5 billion.
The auction pushed its reserves to $16.1 billion for the first time in nearly four years. Pakistan’s depleting dollar reserves were one of the main challenges for the Pakistan Tehreek-e-Insaf when it came into power in August 2018.
Within its first six months, the PTI government saw dollar reserves down to a level that was barely enough to pay for two months of imports. In order to be in the comfort zone, it is recommended that Pakistan has enough reserves to cover at least three months of import payments.
However, Pakistan fell short of this level when its reserves slipped below $6 billion in 2019 and was on the verge of a sovereign default.
To tackle this challenge, Prime Minister Imran Khan’s government signed a $6 billion bailout with the International Monetary Fund (IMF), which has since been a topic of national debate.
Since the agreement with the IMF, the country has secured funding from multilateral donors like the World Bank and Asian Development Bank, which has helped strengthen its reserves.
Higher foreign exchange reserves stabilize the dollar rate and a persistent increase in reserves tends to bring the dollar rate down in the country. The means the rupee becomes stronger.
