Pakistan’s Finance Minister Muhammad Aurangzeb has said that the country will issue Panda Bonds worth 300 million dollars this year to tap the Chinese market, the state media reported on Friday.
Radio Pakistan reported that the minister in an interview with Bloomberg said That China is the second largest bond market in the world and Chinese investors can take advantage of Panda bonds. The Minister said initially bonds worth 250 million to 300 million dollars will be issued and the volume of Panda bonds will be enhanced at a later stage. He said the government’s cash balances are strong enough that it can pay its debts on time. He said the country is heading in the right direction towards economic stability.
Aurangzeb made it clear that the payments are unlikely to put pressure on the currency and expressed confidence that the Pakistani rupee will hopefully remain stable. The Finance Minister also said Pakistan will go for an IMF programme with at least a three-year duration. He expressed confidence that the growth rate will be better in the next financial year, according to the report. Prime Minister Shehbaz Sharif already said on Thursday that macroeconomic stability in Pakistan would not be possible without another loan from the IMF.
Addressing the Special Investment and Facilitation Council’s (SIFC) apex committee, he said that the government would have to work towards a medium-term programme which would have a duration of two-to-three years. “And during those years, the government will have to undertake deep-rooted structural reforms,” the premier added. The remarks came a day after the government and the IMF signed the staff-level agreement that would pave the way for the payment of $1.1 billion final tranche next month, which would complete the $3 billion loan short-term loan programme agreed last year.
Meanwhile, the IMF already confirmed that Pakistan was seeking a 24th medium-term bailout package. The two sides are expected to soon start negotiations for a fresh loan.
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