The State Bank of Pakistan (SBP) paid back $1 billion against Sukuk bonds on Friday, three days before its maturity.
There has been growing uncertainty about the South Asian country’s ability to meet its external financing obligations, as the nation faces depleting foreign exchange reserves which have dropped to $7.5 billion, and is still reeling from devastating floods that killed over 1,700 people.
Bloomberg on Friday reported the SBP transferred the payment on the dollar bonds, which were to mature on December 5, to Citigroup Inc.
Citi will distribute the funds onward to creditors, informed Abid Qamar, chief spokesperson at the SBP.
Last week, SBP Governor Jameel Ahmad told an analyst briefing that the bond repayment of $1.08 billion, which matures on December 5, would be made early.
He added that funding had been lined up from multilateral and bilateral sources to ensure the repayment would not affect foreign exchange reserves.
Moreover, talks with the International Monetary Fund (IMF) for the next loan tranche have also been delayed leaving Pakistan in dire need of external financing.
However, Finance Minister Ishaq Dar on Friday said that the country expects to secure $3 billion in external financing from a friendly country in two weeks.
In an interview to Geo News on Friday, Dar said he was not concerned whether the IMF’s team arrived or not for the ninth review of Pakistan’s $7bn Extended Fund Facility (EFF).
‘Won’t take IMF’s dictation’: Dar
“I don’t care if they come. I don’t have to plead before them. I have to look at Pakistan’s matters.”
He added that the IMF team was “most welcome” to come and the government was dealing with it on a weekly basis.
“Our ninth review is totally in order. Everything is in order and under normal circumstances … I have reassured them that our ninth review is in order and you should come and give Pakistan the $500 million,” Dar said.
He said the IMF could “not dictate” to the government. “If they don’t come then we will manage — no problem,” the finance minister added.
Earlier, the Kingdom of Saudi Arabia (KSA) had extended the term for a $3 billion deposit in the SBP through the Saudi Fund for Development (SFD) "in support of the Pakistani economy", the central bank said on Friday. The funds are already part of the SBP-held foreign exchange reserves.