Govt Sukuk Bonds of Worth $1 Billion Issue Plans

Govt Sukuk Bonds

Govt of Pakistan is planning to issue Sukuk Bonds within the next couple of months to support its financial and budgetary needs of money.

Govt has paid off a Sukuk Bond worth $1 Billion that was matured on 13th October 2021 and due to which central reserves of the State bank fell down.

The new Sukuk Bonds will be issued for 5 to 7 years in the international market its likely that M2 Motorway will be kept for security against this new issuance of bonds.

These Islamic Bonds will be floated at the Islamic rate of return which still has not been decided or announced by the Govt of Pakistan.

Preparation is being made to issue Sukuk Bonds in the international market.

State Bank of Pakistan has announced a tender to invite the banks to bid for the Sukuk ijara.

Pakistan is in great financial need and the economy is suffering from a big decline due to certain reasons.

By entering into the IMF package, inflation soared to the sky in Pakistan and Govt is receiving huge criticism from the citizens.

At the cost of goodwill in the public, Govt is taking an unpopular decision to remain in the financial market and to control the inflation which until now is out of control of the Govt.

In order to meet the budgetary demands and financial needs of the country, it was decided in the budget to issue Sukuk and Euro bonds of worth $3 billion.

Pakistan has already issued $1 Billion worth of Euro Bonds in June this year and they were oversubscribed by the investors and Pakistan received $2.5 billion against those Eurobonds.

Four banks have been hired by the Central bank to launch and execute the plan of Govt Sukuk Bonds in the international market with the back of an asset of M2 motorway for these Sukuk bonds.

Due to falling foreign reserves held with the State bank of Pakistan, increasing and uncontrollable trend of inflation in the country, and decreasing worth of Pak Rupee against US Dollar, Pakistan is in a greave need of financial support.

In order to reduce the current account deficit which was widened due to increased imports, Pakistan has successfully borrowed $3 billion from Saudi Arabia at 3% interest rate and $1.2 billion petroleum products will also be given by Saudi Govt at deferred.3

payments.

 

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