Pakistan to Raise $2.08B via International Bond Markets

Karachi, Jun 20 (PTI) Pakistan's government has finalised plans to raise at least USD 2.08 billion by exploring international bond markets in the fiscal year 2026-27.

Finance Minister Muhammad Aurangzeb told the media on Saturday that this would allow Pakistan to gradually replace a portion of the country's bilateral borrowing with market-based financing.

The target of USD 2.08 billion represents a fivefold increase from the outgoing year's target of USD 417 million.

According to budget documents, the government, in a bid to stabilise the economy, is also looking at borrowing USD 2.45 billion from commercial banks in the coming fiscal year from July 1 through Panda Bonds, Eurobonds, US dollar-denominated bonds and its first rupee-linked, dollar-settled instrument.

The planned bond issuances would take Pakistan's next year's commercial borrowing to USD 4.53 billion.


The budget documents state that these targets are part of the government's strategy to secure USD 19.9 billion in foreign financing, a 26 per cent increase from USD 15.9 billion.

Pakistan's fragile economy needs billions of dollars in external financing each year to repay maturing debts, fund its balance-of-payments needs and maintain foreign exchange reserves, relying on a mix of multilateral lenders, bilateral partners and international capital markets.

The government has estimated its FY-27 foreign debt repayment obligations at USD 3.9 billion, 15 per cent more than what it repaid in the outgoing fiscal year, which ends on June 30.

Pakistan had to pay back a USD 3.45 billion debt to the United Arab Emirates a few months back, but managed to handle the situation by obtaining an additional long-term deposit of USD 3 billion from Saudi Arabia.

The budget documents show that Pakistan's external debt rose 1.2 per cent to USD 138 billion by March this year from USD 136 billion a year earlier.