Cash-strapped Pakistan raises $1 billion through Islamic bond at record interest to keep forex reserves afloat
The Hindu
Pakistan has issued the 7-year tenor asset-backed Sukuk bond to raise $1 billion at an interest rate of 7.95%
Pakistan has raised a whopping $1 billion loan through the Sukuk bond at a record 7.95% interest rate, the highest cost that the cash-strapped country has agreed to pay in its history on an Islamic bond, and has also agreed to pledge a portion of the Lahore-Islamabad Motorway in return for the much-needed loan, media reports said on Tuesday.
The Ministry of Finance said the country had to raise the loan to keep the official foreign exchange reserves at their levels ahead of some major foreign loans’ repayments, The Express Tribune newspaper reported.
The government led by Prime Minister Imran Khan went to international capital markets after it consumed nearly $2 billion out of the $3 billion borrowed from Saudi Arabia one-and-half months ago, which brought down the gross official foreign exchange reserves to $17 billion as of January 14, it said.