ISLAMABAD: Pakistan has decided to raise over $1 billion from the international market through the issuance of Sukuk bonds in the next couple of months.
The Ministry of Finance has initiated the Medium-Term Notes (MTN) programme covering both Eurobonds and Sukuk.
Through a notification, the ministry on Friday has invited interested financial institutions to submit their proposals individually to work as Finance Division’s financial advisers to register, structure, launch and execute the MTN Programme.
The federal cabinet had already allowed the ministry to launch the MTN programme.
For the purpose of the one-year MTN programme, the Finance Division plans to engage two consortia, each consisting of five financial institutions, for issuance of Eurobonds and Sukuk under the programme. The selected consortia are expected to guide, advise, manage, coordinate and execute the entire range of activities associated with the programme.
According to ministry officials, the government, as per the plan, is expecting to raise over $1 billion from the Sukuk bonds. Meanwhile, the government would also issue local Sukuk bonds worth Rs400 billion soon.
The amount raised from international Sukuk would improve the country’s foreign exchange reserves. The total liquid foreign reserves held by the country stood at $15.75 billion as on September 12, 2019, while the central bank’s reserves were recorded at $8.46 billion.
The federal government, in the annual budget for the current fiscal year 2019-20, had projected to generate Rs450 billion (around $2.8 billion) for the Sukuk bonds. The issuance of Sukuk bonds would be part of the government’s plan to borrow $13 billion from foreign sources during ongoing fiscal year.
Pakistan had already made $495 million foreign borrowing from multilateral and bilateral sources during the month of July 2018.
The country has borrowed $99.43 million from bilateral sources, $221.83 million from multilateral and $173.3 million from the commercial banks during the first month of the current fiscal year.
