Pakistan repays $1billion against Eurobond. Pakistan has successfully repaid a $1 billion international bond, marking a significant step forward amidst signs of economic revival.
The repayment was confirmed by the State Bank on Saturday, highlighting the nation’s commitment to financial stability and responsible debt management.
Smooth Execution of Repayment
According to a statement from the central bank, Pakistan executed the repayment of the $1 billion bond on April 12, 2024.
This payment included both the principal amount and accrued interest, which was remitted to the designated agent bank for distribution among bondholders.
Stabilizing Foreign Exchange Reserves
Recent data indicates a positive trend in Pakistan’s foreign exchange reserves. The State Bank’s reserves have been steadily increasing by $19 million per week, reaching a total of $8.04 billion.
When factoring in reserves held by commercial banks, the nation’s total liquid foreign reserves have climbed to $13.38 billion, with net reserves in commercial banks amounting to $5.34 billion.
Impact on Reserves Post-Repayment
Following the successful bond repayment, State Bank-held reserves are expected to decrease to approximately $7 billion.
To bolster these reserves and further support economic recovery efforts, Pakistan is actively pursuing financial assistance from the International Monetary Fund (IMF).
IMF Agreement and Economic Outlook
Pakistan recently reached a staff-level agreement on the final review of its $3 billion Stand-By Arrangement (SBA) with the IMF.
This agreement sets the stage for the IMF’s Executive Board meeting in late April, during which approval is anticipated for the disbursement of around $1.1 billion (SDR 828 million) as the final tranche of the SBA.
As Pakistan repays $1billion against Eurobond, IMF Managing Director Kristalina Georgieva acknowledged Pakistan’s progress under the current IMF program, citing improvements in the economy and the rebuilding of reserves.
Also read: IMF signals to ‘engage’ with Pakistan on fresh bailout
However, she emphasized ongoing challenges that Pakistan must address, including the need to broaden the tax base, increase contributions from wealthier segments of society, enhance transparency, and optimize public spending.
