Pakistan has asked the International Monetary Fund (IMF) to relax conditionalities under the USD six billion Extended Fund Facility (EFF) relating to the Financial Action Task Force (FATF) and issuance of sovereign guarantees to help raise over USD four billion from domestic and international markets, Dawn reported on October 31. Pakistan has budgeted about USD three billion bonds (about PKR 450 billion) — Islamic Sukuk and Eurobond — to be launched in the international capital markets during the current fiscal year to meet targets under the EFF for foreign inflows. Separately, the Government has planned to raise about PKR 200 billion from domestic Islamic banks for the power sector to scale down circular debt.
“We are dying to complete these transactions at the earliest,” an unnamed senior Government official told Dawn, adding that the capital market conditions were never as conducive as at present. He said the return on bonds had plummeted to almost zero in the international capital markets and investors were finding it hard to secure profits on secured papers. “This provides an ideal opportunity for Pakistan to tap international capital markets to secure sovereign bonds at a minimal interest rate,” the official added. Pakistan had last tapped the international capital markets in 2016 at about 8.25 per cent mark-up when average yield hovered between 3pc and 5pc for other countries.