ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet allowed the Asian Development Bank (ADB) to launch offshore Pakistan Rupee (PKR)-linked bonds of up to $200 million to non-residents based on conducive market conditions, a national daily reported.
The ECC meeting chaired by the Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh, on Wednesday, approved several key decisions, including the payment of liabilities and responsibilities resulting from a debt of $105 million secured by the Pakistan International Airlines Corporation Limited (PIACL)-owned Roosevelt Hotel in Manhattan, New York.
The committee also approved a proposal by the Finance Division to allow the ADB to launch offshore Pakistan Rupee (PKR)-linked bonds. As per State Bank of Pakistan (SBP) recommendations the programme will be restricted to a maximum of $200 million.
The local currency proceeds of the bonds will be used for financing long-term infrastructure and energy projects in Pakistan. For this purpose, a formal permission letter will also be issued to the ADB. The yields on these bonds can be in the range of 0.50 percent to 2.00 percent below the yield curve of domestic Pakistan government bonds.
The ECC had already granted the approval, in principle, to launch these bonds in its meeting held on July 15, 2020 with the condition that a resubmission of the case will be made to ECC before launching of the programme, which took place in the ECC meeting yesterday.