Pakistan Plans to Return to Global Capital Markets, Eyes $1-2 Billion Eurobonds
ISLAMABAD: Pakistan is preparing to return to international capital markets as the government seeks to reduce its reliance on bilateral borrowing and attract greater investment, Federal Minister for Finance Muhammad Aurangzeb has said.
Announcing plans to re-enter global capital markets, Aurangzeb said Pakistan was considering issuing $1 billion to $2 billion in Eurobonds during the current fiscal year.
The government has already appointed a consortium of banks to arrange the issuance of Eurobonds and Sukuk in international markets.
The finance minister said Pakistan was also preparing to issue $750 million worth of Chinese yuan-denominated bonds, commonly known as Panda bonds.
Aurangzeb said a $10 billion swap line with the United States would serve as a confidence signal for private investors. He said constructive progress had been made on the proposed swap arrangement with Washington and Pakistan expected a response within the next few months.
He said Pakistan was focusing on increasing trade and investment with the United States, adding that the US Export-Import Bank and the Development Finance Corporation (DFC) could play an important role in Pakistan.
The finance minister said the government wanted to shift Pakistan’s economy from dependence on aid toward trade and investment.
He added that increasing exports and reducing reliance on imports remained among the government’s key priorities.
According to Aurangzeb, Pakistan’s trade deficit had increased to $39.5 billion in the year ending June.
He said China remained Pakistan’s largest bilateral creditor, accounting for around 23 percent of the country’s total external debt of $129.7 billion.
The finance minister clarified that Pakistan was not currently seeking additional financing from China.
Aurangzeb said S&P Global Ratings had upgraded Pakistan’s credit rating to “B”, while the government was working to achieve a “B+” rating within the next 12 months.
He added that the government’s ultimate objective was to improve Pakistan’s credit rating to the “BB” category.
