Pakistan has committed to participate in the Asian Bond Market initiative and has committed $ 50 million for Asian Bond Fund.
The objective is to establish an effective international pricing benchmark and to ensure that the country''s debt instruments are present in key markets.
The government plans to return to the international capital markets with bonds issue to diversify its sources of financing development and expanding its international investor base by accessing global markets, says a government document.
This policy will be carefully implemented to ensure that the government finances the deficit with recourse to low-cost concessional borrowing first.
The government has already announced for Eurobond issue in international market for around $ 500 million, for which four banks have been awarded the mandate of issuing the bonds.
This bond market return is largely for promotional purposes rather than fiscal needs. An upbeat scenario for investors would help this campaign to build the county''s image.
Apart from this, State Bank, on its own, has decided to invest over $3 billion through foreign banks in better return options.
Pakistan''s first foreign currency bond, a $ 300 million eurobond, was launched in 1997 when it was in dire need of foreign exchange supplies.
The country''s credit rating had fallen drastically, after it conducted tit-for-tat nuclear tests after India in 1998, and it found itself on the verge of defaulting on foreign loan repayments.
Dazzling macroeconomic performances in the past two years, aided by extensive debt rescheduling and write-offs as well as a series of reforms under President Pervez Musharraf, have sent its credit rating back up from SD in 1999 to B, according to the latest grading from credit rating agency Standard and Poor''s.
Comments
Comments are closed.