State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Friday that Pakistan will pay back a $1 billion international Sukuk bond three days before its due date of December 5, 2022.
Given that Pakistan is recovering from terrible floods that claimed more than 1,700 lives and experiencing an economic crisis, there has been rising concern about its capacity to satisfy its obligations for external finance.
SBP Governor stated during a briefing that the bond repayment, which expires on December 5, totals $1.08 billion.
In order to guarantee that the repayment would not have an impact on foreign exchange reserves, Jameel noted that finance had been arranged from both international and bilateral sources. Next week on Tuesday, the Asian Infrastructure Investment Bank was anticipated to make an immediate infusion of $500 million, he added.
As of November 18, Pakistan’s reserves at the central bank were just $7.8 billion, which is not enough to pay for a month’s worth of imports.
However, Jameel stressed that he was optimistic the reserve number will be “far higher” by the end of the financial year in June 2023. Reserve levels will rely on the continuous realisation of anticipated inflows and the rollover of loans from friendly nations.
He stated at the briefing that he anticipates that the inflows from foreign lenders would allow him to meet his external finance needs on schedule. Despite payments of $1.8 billion in November, he emphasised that reserves were steady.
The early completion of Pakistan’s flood recovery plan, according to the International Monetary Fund (IMF), is crucial for negotiations and ongoing financial assistance from multilateral and bilateral partners.
Pakistan is now enrolled in an IMF bailout programme, which it joined in 2019. Despite the fact that Pakistan is fighting a full-blown economic crisis with decades-high inflation and limited reserves, a fixed date for the ninth review to release much-needed cash is still pending.
