ISLAMABAD - The government has not decided yet to issue bonds in international market due to the unwanted situation as Pakistan is struggling to get $3.5 billion from international commercial banks due to higher interest rate, which would affect the government plan to increase the country’s foreign exchange reserves. The budgeted inflows from foreign commercial banks ($3.5 billion) and international capital markets ($1.5 billion) seem unlikely to materialize, but it is planned to mobilize $ 0.5-1.0 billion from foreign commercial banks as new financing, according to the official documents.
Meanwhile, the government is also struggling to issue bonds in international market. It is worth mentioning here that Pakistan has received $8.16 billion loans from international lenders in the first six months (July to December) of the current fiscal year. The country has received $5.96 billion in budget and project financing and another $2.2 billion came in State Bank of Pakistan’s account. The inflows helped in building the country’s foreign exchange reserves, which earlier were depleting. The major financing of $3 billion came from Saudi Arabia and the United Arab Emirates (UAE). The IMF disbursed $1.2 billion.
An official of the ministry of finance informed that the new government would decide about the issuance of bonds in international market after reviewing the situation. Gross external financing needs for FY24 will amount to approximately $25.0 billion (including the current account), of which about $13.8 billion is amortizations of the public sector. Ahead of the SBA approval the governemnt secured $5.6 billion in additional financing commitments from bilateral, multilateral, and commercial partners, of which over $3 billion has already been disbursed. The government has also secured commitments from these partners regarding $7 billion in rollovers, $1 billion in refinancing of maturing debt, and $1.2 billion in amortization savings from a debt rearrangement covering some existing external loans. In line with program financing commitments, key bilateral creditors will at least maintain their exposure to Pakistan.