Pakistan’s central bank announced on Saturday that it had successfully repaid $1 billion in Eurobonds, marking a timely payment ahead of the country’s pursuit of a long-term bailout from the International Monetary Fund (IMF).
The Eurobond, which was issued in 2014 and reached maturity this month, was settled on Friday, with the central bank ensuring the payment was made to the agent bank for subsequent distribution to bondholders, as stated in an official statement.
Pakistan has grappled with a range of economic challenges, including a balance of payments crisis, surging inflation, and significant currency devaluation, following the implementation of an IMF standby arrangement, which prevented a sovereign default.
Finance Minister Muhammad Aurangzeb is scheduled to depart for Washington on Sunday to participate in the IMF-World Bank spring meeting, where negotiations for Pakistan’s 24th long-term IMF bailout will commence. Ahead of his departure, Aurangzeb briefed Prime Minister Shehbaz Sharif about the proposed IMF program on Friday, according to government sources.
The previous IMF standby arrangement, amounting to $3 billion, expired on Thursday, with the final tranche of $1.1 billion anticipated to be released subsequent to the multilateral lender’s board meeting later this month.
Recent discussions between Pakistan and the IMF have centered on the formulation of a longer-term bailout program aimed at implementing essential policy reforms to address deficits, bolster reserves, and manage the escalating debt burden.
IMF Managing Director Kristalina Georgieva confirmed on Thursday that Pakistan is engaged in talks regarding a potential follow-up program, indicating ongoing efforts to address the country’s economic challenges through collaborative measures.
