Pakistan has successfully completed the repayment of $1 billion towards its International Bond on April 12, 2024, as announced by the State Bank of Pakistan (SBP) on Saturday.
This repayment, covering both the principal amount and accrued interest, was swiftly transferred to the agent bank for further distribution among the bondholders, the SBP confirmed.
Shahid Ali Habib, CEO of Arif Habib Limited, shared insights on Saturday, stating, “Following the repayment of the 2024 bond, Pakistan’s total outstanding international bonds/Sukuks now stand at $6.8 billion, equivalent to 6.8% of public external debt. The next maturity is scheduled for $500 million in September 2025.”
In recent weeks, Pakistan’s foreign exchange reserves have shown signs of stabilization. Data indicates a weekly increase of $19 million in reserves held by the SBP, reaching a total of $8.04 billion as of March 29. The country’s overall liquid foreign reserves now amount to $13.38 billion, with commercial banks holding net foreign reserves of $5.34 billion.
Despite the decrease in SBP-held reserves to approximately $7 billion following the repayment, Pakistan expects an inflow from the International Monetary Fund (IMF). Last month, Pakistani authorities achieved a staff-level agreement on the second and final review of the $3 billion Stand-By Arrangement (SBA). The IMF Executive Board is anticipated to convene “in late April” to approve the disbursement of around $1.1 billion (SDR 828 million) as the final tranche of the SBA.
During a recent event at the Atlantic Council think tank, IMF chief Kristalina Georgieva commended Pakistan’s progress in successfully completing its existing program with the IMF. She acknowledged signs of improvement in Pakistan’s economy, particularly the replenishment of reserves. However, Georgieva underscored key areas for Pakistan to address, including expanding the tax base, ensuring contributions from wealthier segments of society, directing public spending effectively, and fostering transparency.
The timely repayment of international bonds underscores Pakistan’s commitment to financial stability and responsible debt management. Moreover, its ongoing collaboration with the IMF reflects a proactive approach towards addressing economic challenges and promoting sustainable growth.
