Pakistan plans rupee-denominated, dollar-settled bond, says Aurangzeb

Finance Minister Muhammad Aurangzeb said on Friday that Islamabad plans to float a bond denominated in rupees but settled in dollars. The move follows a $3 billion dual-tranche Eurobond issue, and Business Recorder reported that it aims to widen the funding base and rely less on domestic banks. No size, maturity or timing was given for the instrument.

Aurangzeb's remarks followed a $1.75 billion 5.5-year issue at a 7.5% coupon and a $1.25 billion 10-year issue at 7.9%. The finance ministry stated that orders totalled nearly $6 billion, about double the volume issued, from institutional investors across several continents. In an Asian Development Bank forum in Islamabad on PPPs and privatisation, he said heavy reliance on banks is unsustainable and debt capital markets need broader investors, including insurers and NBFIs.

He also cited efforts to open government securities to small investors, including a JazzCash tie-up and a State Bank app for direct investment. Aurangzeb added that Pakistan had tried to tokenise a portion of its outstanding Eurobond debt following Hong Kong's example. Reserves reached $18.4 billion on June 30, and the government's $21 billion goal for the close of the present fiscal year would cover slightly over three months of imports. He further said the government is monitoring the US-Iran conflict for its effect on growth and inflation forecasts.