Pakistan has to pay $600 million on maturity of five-year Euro Sukuk Bond to foreign buyers on January 26, sources in the banking industry told Business Recorder on Thursday. They said Pakistan entering the international bond market had launched its first-ever Euro Bond in 2004 to dig up foreign exchange and since than the country has auctioned overall $1800 million bonds in the global market.
"The country auctioned $500 million of five-year Euro Bond in 2004, while in 2005 it launched five-year Islamic Bond - Euro Sukuk Bond," sources said. The country sold $500 million Euro Sukuk Bond in January 2005, which is being maturated on January 26, 2010, they added. Overall $5 million bonds were auctioned at a price of $100 per bond in the international market.
"Pakistan has to pay $600 million as a maturity payment of auctioned Sukuk bonds," sources said and added that the overall payment included $500 million of actual value of the bonds and $100 million interest. At the time of auction, the yield on bonds stood at about 6.875 percent, which surged to over 10 percent in December 2009 due to ongoing political crisis and poor law and order situation.
However, the yield on Pakistan's Sukuk Bond has declined by 178 basis points to 8.60 percent in the world market after the IMF's fourth tranche. Sources said the payment of $600 million would put negative impact on the exchange rate and the forex reserves, which recently reached $15 billion.
"The country's forex reserves may again deplete following this payment as the PKR, which is already under pressure for last two weeks, may see further pruning against the dollar," they added. The PKR set a record low for fourth consecutive day on Thursday because of high demand of the dollar for payments against oil import. The rupee fell to a record low against the dollar, closing at 84.79 and 85.00 for buying and selling, respectively.