Pakistan Repays USD 1 Billion Foreign Debt Via Sukuk; Preparing Another USD 1 Billion Sukuk

Pakistan has settled USD 1 billion of foreign debt on the 13th of October 2021 that was raised in October 2016 by floating International Sukuk at a rate of return of 5.5%. The country’s Ministry of Finance is also preparing to borrow another USD 1 billion through the issuance of International Sukuk, according to local media reports, quoting officials from the ministry.

Why it Matters?

The repayment will briefly hit the debt-based foreign exchange reserves of the country which currently stand at around USD 19 billion. The repayment comes amid demand from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to probe a two-year-old decision to raise interest rates, which has caused losses of PKR 2.5 trillion to the country’s e...