Issuance of bonds in international market may not be effected by Pak-US relations

President Pakistan Businessmen and Intellectuals Forum (PBIF) and former provincial minister Mian Zahid Hussain on Friday said sour relations between Pakistan and the United States may not affect the issuance of bonds in the international market. 

The government is planning to return to the international debt market for the fifth time and hopes to raise $1 billion through the issuance of Eurobond or sukuk bonds by offering lucrative returns. 

Hussain said that the decision has been taken to bridge the current account deficit, which may hit the mark of $16bn by the end of the year while the trade deficit from last year is already over $32bn dollars.

He added that apart from the relations between Pakistan and the US, the political situation in the country, reports by IMF and other institutions and the review by credit rating agencies will play an important role in the sale of bonds in the international market.

Pakistan plans to raise $500 mn to $1 bn via sukuk or Eurobond: sources

Govt said it would raise $1 billion via sukuk bond in the 2017/2018 fiscal year

"Any negative report by credit rating agencies will scare away the investors and the country will have to offer higher interest rates to lure them," said Hussain. 

He further said a that the international market is facing problems of excess liquidity and investors are trying hard to find avenues of investment which is good for Pakistan.

The debt sale would be the fifth round to be issued by the government as bonds worth $4.5bn have already been issued, he informed.

Many developing countries have already tapped international markets to benefit from the low-interest rate environment.