Pakistan has received $2.5 billion proceeds of Pakistan sovereign bonds and Pakistan International Sukuk, recently auctioned in the international market. In the last week of November, Pakistan has successfully conducted transaction for sale of 10-year Eurobond and five-year Sukuk (Islamic Bond) amounted to $2.5 billion to replenish the depleting foreign exchange reserve and reduce the pressure on the external account.

The country had raised some $1.5 billion through sale of 10-year Eurobond at 6.875 percent, while, an amount of $1 billion was generated against sale of five-year Sukuk at 5.625 percent. After successful transaction, the State Bank of Pakistan (SBP) has received an amount of $2.5 billion on December 5, 2017 as proceeds from Pakistan sovereign bonds and Pakistan International Sukuk, SBP reported on Thursday.

With arrival of these inflows, the country''''s depleting foreign exchange reserves received a significant boost and once again reached near about the 21 billion dollar mark in the first week of December. After receiving proceeds of Sukuk and Eurobond the SBP''''s reserves surged to $14.883 billion and the country''''s total liquid foreign reserves surged to $20.986 billion mark. Since the beginning of this fiscal year (FY18), the country''''s total foreign exchange reserves were on decline due to scheduled external debt payments mainly to the International Monetary Fund (IMF).

Excluding these inflows, the country''''s total liquid foreign reserves were fell sharply $2.6 billion during the first five months (July-Nov) of this fiscal year. Pakistan''''s total foreign exchange reserves declined to $18.745 billion as on November 30, 2017 compared to $21.368 billion as on June 30, 2017. During the period under review, entire decline was witnessed in the reserves held by the SBP due to external debt servicing. While, banks'''' foreign exchange reserves posted some increase.

In first five months of this fiscal year, reserves held by SBP declined $3.483 billion to reach $12.661 billion as on November 30, 2017 down from $16.143 billion as on June 30, 2017. During the period under review, reserves held by banks increased $859 million to $6.084 billion. Alone in the last week of November 2017, SBP''''s foreign exchange reserves decreased by $887 million due to external debt and other official payments.

Bankers said that with arrival of proceeds of Sukuk and Eurobond, Pakistan''''s foreign exchange reserves have been surged to almost level of last fiscal year and enough for five months imports. They said the government has already taken some steps to curtail the import of luxury items and regulatory duty has been imposed several products with an aim to reduce the import bill.

Copyright Business Recorder, 2017