ISLAMABAD
The government has been informed by the multinational banks that the peaceful transition of power has allayed the apprehensions about Pakistan in the international financial markets and conditions were suitable for approaching the bond market.
An informed source said that the finance ministry had sought an opinion from a few banks on approaching the bond market. The opinion was sought before the Supreme Court decision. The banks’ reply was received after the decision and election of a new premier.
One of the banks reported that the markets were sceptical about Pakistan after the disqualification of the former prime minister as there were fears that the country might head towards destabilisation. However, the election of new prime minister and oath taking by a new federal cabinet gave a message of stability to international financial markets.
The government is looking for generating $ 1 billion. The banks have hinted an interest rate of 5 per cent as compared to 8 per cent interest given two years back. The market is bullish in Pakistan and the banks have recommended approaching the market, the source said.
Due to the decline in exports and remittance, the government is looking to float bonds to ward off pressure on its foreign exchange reserves. The government has borrowed $ 10 billion in the last one year.
Experts have pointed out that the Pakistan’s external sector has come under immense pressure during the last one year due the widening of the current account deficit. Pakistan’s total external debt has increased to $ 76 billion at the end of March 2017.
