Pakistan is preparing to tap international capital markets with a diversified fundraising strategy, as Finance Minister Muhammad Aurangzeb said that the issuance of a $250 million Panda bond is in the final stages.
Aurangzeb announced while addressing the EU-Pakistan High Level Business Forum at the Grand Ballroom, Marriott Hotel, Islamabad on Tuesday.
“We are in the final stages of the inaugural Panda bonds. This is going to be roughly $250 million in RMB. If all goes well, then by the middle of May, we will have printed that as well,” he said.
The minister informed that the government has also announced the Global Medium-Term Note (GMTN) programme to raise funds from international markets.
“For the next two to three years, we will be able to access Eurobonds, Sukuks, and for the first time, we are going to make an attempt at dollar-settled-rupee-rate-bond, because we have received a lot of feedback from our institutional investors, as there has been a missing link in terms of our product repertoire,” he added.
Earlier on Monday, Jameel Ahmed, Governor of the State Bank of Pakistan (SBP), expressed confidence that SBP’s foreign exchange reserves would reach above $18 billion by June this year.
“That will take us to roughly three months of import cover, which is an international benchmark,” said Aurangzeb.
Addressing the participants, the finance minister said repatriation of profits and dividends is important for both local and international investors. “This is the only way to convert macro stability into sustainable growth as we go forward.”
On the taxation front, the minister admitted that the government has “a long way to go” in terms of reforming the taxation system. “We have been able to move the needle in terms of tax-to-GDP ratio, and improve absolute revenues by deepening and widening the tax base.”
He shared that the government has benefited from Artificial Intelligence (AI) in plugging its system leakages.