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Wednesday, May 22, 2024  
13 Dhul-Qadah 1445  

Pakistan’s central bank repays $1 billion international bond

Repayment will cause a decline in the SBP-held reserves to about $7 billion

The State Bank of Pakistan (SBP) announced on Saturday that Pakistan has successfully repaid its $1 billion International Bond on April 12, 2024.

The repayment, which includes both the principal amount and interest, was made to the agent bank responsible for distributing the funds to the bondholders.

This repayment is significant for Pakistan, as it signals the country’s commitment to fulfilling its financial obligations and maintaining stability in its foreign exchange reserves.

The SBP’s reserves have shown some improvement in recent weeks, with an increase of $19 million on a weekly basis, reaching $8.04 billion as of March 29.

Although this repayment will cause a decline in the SBP-held reserves to about $7 billion, Pakistan expects to receive an inflow of funds from the International Monetary Fund (IMF).

Last month, Pakistani authorities reached a staff-level agreement on the final review of the $3 billion Stand-By Arrangement (SBA) with the IMF. The approval of this agreement by the IMF Executive Board, expected to take place in late April, will allow Pakistan to receive approximately $1.1 billion as the final tranche of the SBA.

IMF chief Kristalina Georgieva has acknowledged Pakistan’s progress in completing its existing program with the IMF and noted that the country’s economy is showing signs of improvement, including the accumulation of reserves.

However, she also highlighted important issues that Pakistan needs to address, such as expanding the tax base, ensuring contributions from the wealthier segments of society, optimizing public spending, and fostering a transparent environment.

Overall, the successful repayment of the $1 billion international bond demonstrates Pakistan’s commitment to its financial obligations and its efforts to strengthen its economic stability.

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