Pakistan repays $1 billion foreign debt

pakistan

Pakistan has successfully repaid over $1 billion in foreign debt. The rating agency Moody upgraded the credit rating of Islamabad from ‘negative’ to ‘stable’

State Bank of Pakistan (SBP) official said, “We paid over $1 billion including interest payment at the maturity of a Sukuk today (Monday).”

During the tenure of former Prime Minister Nawaz Sharif, in Nov 2014, Pakistan raised $1 billion by floating a Sukuk in the global market.

The official said, “Yes, the reserves may have decreased by over $1 billion at this time, however, one cannot say the reserves have exactly shrunk by that amount as other transactions (foreign inflows and outflows) have to be accounted for before figuring out the actual volume of the reserves.”

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During the week that ended on Nov 22nd, the foreign currency reserves of Pakistan increased to $8.68 billion from $240 million due to official inflow, as per the State Bank of Pakistan.

Moody’s Investors Service in an announcement said, “Pakistan’s foreign exchange reserve adequacy remains low.”

Adding, “Foreign exchange reserves have fluctuated by around $7-8 billion over the past few months, sufficient to cover just 2-2.5 months of goods import. The change in the outlook to stable is driven by Moody’s expectations that the balance of payment dynamics will continue to improve supported by policy adjustments and currency flexibility.”

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