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Pakistan Prepares to Fulfill $1 Billion Bond Repayment Commitment Amidst Economic Resilience

Pakistan is gearing up to honor its commitment to repay $1 billion on its 10-year dollar bond, scheduled to mature in mid-April. According to Mohammed Sohail, CEO of Topline Securities, the Pak 2024 Bond has witnessed a remarkable rally of over 160 percent (excluding coupons) in the past 18 months.

Pakistan Prepares to Fulfill $1 Billion Bond Repayment Commitment Amidst Economic Resilience

Sohail highlighted earlier concerns stemming from the country’s foreign reserves dipping below $3 billion in February 2023, sparking fears of a potential default on bond payments. However, Pakistan not only successfully repaid $1 billion on its 2023 Bond but also bolstered its foreign reserves, which now stand at just over $8 billion.

While acknowledging that the repayment of the 2024 Bond will lead to a decline in foreign reserves, Sohail mentioned that the anticipated IMF tranche of $1.1 billion, expected by the end of April, is poised to restore reserves to the $8 billion mark.

Furthermore, recent increases in inflows from portfolio investors purchasing shares and treasury bills, along with the State Bank of Pakistan’s gradual acquisition of USD from the market, are contributing to the management of regular debt repayments, Sohail added.

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Pakistan’s proactive measures in managing its debt obligations and securing financial stability despite challenges demonstrate resilience in its economic strategies. As the country navigates through these financial intricacies, it continues to uphold its commitments and foster confidence in its economic trajectory.

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