State Bank of Pakistan Issues PKR 48 Billion Ijarah Sukuk to Finance Budget Deficit

The Government of Pakistan issued PKR 48 billion via the auction of Ijarah Sukuk through the State Bank of Pakistan (SBP), with five-year variable and fixed rental rates. The aim of this issuance is to assist in the financing of the budget deficit.

According to the SBP, the Government raised PKR 27 billion through variable Ijarah Sukuk, whilst the remainder PKR 21 billion was raised via fixed rental rate Sukuk. The cut-off margin on the variable rental rate Sukuk was minus 20 basis points (bps), whilst that on the fixed rental rate Sukuk was 8.37%.

According to banking sector experts, this is the first time the Government has simultaneously issued two products based on fixed and var...