KARACHI: The State Bank of Pakistan (SBP) has repaid $1 billion against euro bonds, creating goodwill for the bonds in the near future.

Pakistan on Friday successfully made a payment of $1bn on an internatio­nal bond, which included principal plus interest, the central bank said in a statement on Saturday.

“The payment was made to the agent bank for onward distribution to the bond holders,” it added.

Pakistan’s USD-denom­inated bonds rallied by 84 per cent in 2024.

The central bank has be­en struggling hard to ma­n­age reasonable fore­ign exchange reserves to satisfy the donor agency, the International Mone­tary Fund (IMF), and to keep the exchange rate stable.

With the outflow of $1bn, the bank’s reserves will fall again close to $7bn. Currently, the SBP’s reserves are around $8bn.

Pakistan is willing to negotiate for another $6bn or $8bn loan package from the IMF. The donor agency has suggested a number of reforms for generating higher revenues, low fiscal deficit, and reduced current account deficit.

The government is willing to implement the reforms, but the outcome is highly critical for the general public and the trade and industry.

As per reforms, the government is increasing oil prices, while the increase in gas prices is at a record high.

The political government is taking risks as the unpopular decisions may erase its acceptability among the masses.

Published in Dawn, April 14th, 2024

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