However, during the past few months, investors have received numerous guarantees from Finance Minister Ishaq Dar and his predecessor Miftah Ismail that Islamabad will quickly return them.
The rapid depletion of Pakistan’s foreign exchange reserves and the rupee’s value decline versus the US dollar over the previous seven working days, however, caused investors to panic.
On Thursday, the Third Pakistan International Sukuk’s yield (rate of return on bonds) reached a new high of 145.1%, up 2.6% from the previous day. The $1 billion bond matures in December 2022, according to a local research firm.
The Pakistan Government International Bond’s yield increased by 4.4% to 84.8%. The bond worth $1 billion will expire on April 15, 2024.
Seven bonds with yields ranging from 19% to 56%. They mature between September 2025 and April 2051 and have a total value of $5.8 billion.
In the week that concluded on October 14, Pakistan’s central bank stated that foreign exchange reserves were steady at $7.6 billion. In the last 10 months, they have decreased together by almost $9 billion as the nation has continued to pay for imports and settle maturing foreign debt.
To pay off maturing foreign debt, finance the current account deficit, and increase foreign exchange reserves to roughly $15-16 billion by the end of the current fiscal year in June 2023, the government too has secured $36-40 billion from multilateral and bilateral creditors. According to officials, the fact that the government is now receiving a $6.5 billion IMF loan program indicates that it won’t skip payments on its debt.
The Pakistani rupee dropped 0.03% (Rs0.07) to settle at Rs220.95 versus the US dollar on Thursday, marking the sixth consecutive working day that it has fallen.
Over the last seven days, the value of the local currency has decreased by 1.45% (or Rs3.16).
It had previously recovered 9.14% (or Rs21.96) cumulatively over the course of 13 business days until it reached Rs217.79 on October 11.