Pakistan raises $370M loan; UAE banks lead

dubai — Pakistan’s government raised $370 million (Dh1.35 billion) through a syndicated term loan and Murabaha financing facility with the help of UAE banks, the largest hybrid — Islamic and conventional — commercial financing this year by the country.

Emirates NBD Capital acted as the global coordinator for the facility, which was oversubscribed by around 1.2 times, garnering a strong response from a syndicate of leading local, regional and international banks comprising Emirates NBD, Sharjah Islamic Bank, Mashreqbank, Commercial Bank of Dubai, Allied Bank Limited Bahrain and United Bank Limited were mandated lead arrangers and bookrunners.

The facility will further improve the South Asian country’s foreign exchange reserves, which have been steadily rising over the last few months as remittances from the country’s diaspora have consistently remained strong.

Reserves jumped $553 million or 2.85 per cent to $19.9 billion in the week ended November 6. The State Bank of Pakistan’s forex reserves grew $558 million to $12.74 billion.

Workers’ remittances remained above $2 billion for the fifth consecutive month in October, amounting to $2.3 billion last month, up by 14.1 per cent compared to October 2019. During July-October, remittances increased to $9.4 billion, recording a growth of 26.5 per cent over the same period last year.

Improvements in Pakistan’s forex market structure and its dynamics were because of the efforts under the Pakistan Remittances Initiative to formalise the flows and limited cross-border travelling.

$ 19.9B

Forex reserves held by Pakistan