Central bank: Pakistan to repay international bond early

PAKISTAN will repay a $1 billion (£836.9 million) international bond on Friday (2), three days before its due date, the governor of Pakistan’s central bank said last Friday (25).

There has been growing uncertainty about the ability of Pakistan to meet external financing obligations with the country in the midst of an economic crisis and recovering from devastating floods that killed over 1,700 people.

The bond repayment, which matures on Monday (5), totals $1.08 billion (£904m), Jameel Ahmad, governor of the State Bank of Pakistan, said, according to two analysts.

Ahmad added that funding has been lined up from multilateral and bilateral sources to ensure the repayment would not affect foreign exchange reserves. An immediate inflow of $500m was expected this week from the Asian Infrastructure Investment Bank, he said.

Ahmad said reserve levels will depend on the continued realisation of expected inflows and rollover of loans from friendly countries, but added he was confident the reserve figure will be “much higher” by the end of the financial year in June 2023.

He said he expects external financing requirements would be met on time because of inflows from international lenders. He pointed out that, despite payments of $1.8bn in November, reserves remained stable.