KARACHI: Pakistan plans to issue Eurobonds in the next fiscal year after securing an improved ratings from international agencies, announced Finance Minister Mohammad Aurangzeb on Tuesday.

Speaking at the launch of the Securities and Exchange Commission of Pakistan’s (SECP) Electronic Mortgage Register, the minister said the economy has stabilised, and regulators and banks must accelerate growth.

The minister said he is in contact with Fitch Ratings, Standard & Poor’s and Moody’s, expressing optimism about achieving better ratings. However, he said the Eurobond issuance will depend on receiving improved ratings, with a target launch in the next fiscal year.

To secure $1 billion in climate financing, Pakistan must present better plans and policies to the IMF, he said, adding that the government is also in discussions with the World Bank and Asian Development Bank regarding climate financing, with negotiations ongoing with the Asian Infrastructure Investment Bank (AIIB). He said he has spoken to the AIIB vice president to seek favourable outcomes.

Says interest rate cuts to boost domestic investment

The minister hoped that the State Bank’s foreign exchange reserves would reach $13 billion by the end of FY25, sufficient to cover imports for three months.

Currently, SBP reserves stand at approximately $11.2bn. The SBP governor indicated that an inflow of $500 million is expected within a week, raising the total to $11.7bn — close to the $13bn target.

Given the $98m current account deficit, a 39pc increase in remittances, higher export proceeds and increased foreign direct investment, the possibility of achieving $13bn in reserves has improved, with expectations of meeting the target before the end of FY25.

On Monday, the State Bank cut its policy rate by 250 basis points to 15pc.

The finance minister said the interest rate had been reduced to encourage domestic investors.

He said the Karachi Interbank Offered Rate has dropped to 13pc, presenting a favourable opportunity for local investors.

However, trade and industry representatives are calling for the the interest rates to be brought into single digits.

At the same time, financial experts have advised the State Bank to take a cautious approach regarding further cuts.

The finance minister said the government is focused on improving taxation to meet targets and is leveraging digitisation to reduce corruption within the Federal Board of Revenue. He also mentioned the ongoing efforts to lower power tariffs, as electricity costs are a significant burden for many middle and lower middle-class families nationwide.

Mr Aurangzeb said foreign investors are eager to invest in Pakistan. Recently, the pime minister visited Saudi Arabia and the UAE to attract investment, with both governments expressing commitments to invest in Pakistan.

Published in Dawn, November 6th, 2024

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

From hard to harder

From hard to harder

Instead of ‘hard state’ turning even harder, citizens deserve a state that goes soft on them in delivering democratic and development aspirations.

Editorial

Canal unrest
Updated 03 Apr, 2025

Canal unrest

With rising water scarcity in Indus system, it is crucial to move towards a consensus-driven policymaking process.
Iran-US tension
03 Apr, 2025

Iran-US tension

THE Trump administration’s threats aimed at Iran do not bode well for global peace, and unless Washington changes...
Flights to history
03 Apr, 2025

Flights to history

MOHENJODARO could have been the forgotten gold we desperately need. Instead, this 5,000-year-old well of antiquity ...
Eid amidst crises
Updated 31 Mar, 2025

Eid amidst crises

Until the Muslim world takes practical steps to end these atrocities, these besieged populations will see no joy.
Women’s rights
Updated 01 Apr, 2025

Women’s rights

Such judgements, and others directly impacting women’s rights should be given more airtime in media.
Not helping
Updated 02 Apr, 2025

Not helping

If it's committed to peace in Balochistan, the state must draw a line between militancy and legitimate protest.