Govt to float foreign currency, rupee bonds

Published: June 11, 2011
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US senators called for reviewing Pakistan's efforts to end its support for terrorist groups, prevent al Qaeda, the Taliban and others from operating on Pakistani soil. PHOTO: REUTERS

US senators called for reviewing Pakistan's efforts to end its support for terrorist groups, prevent al Qaeda, the Taliban and others from operating on Pakistani soil. PHOTO: REUTERS

ISLAMABAD: 

The federal government has planned to float $500 million worth of foreign currency sovereign bonds and Rs25 billion worth of rupee bonds in the upcoming financial year aimed at reducing reliance on foreign loans and assistance, an official said.

A finance ministry official said in order to implement the plan the government was formulating a medium-term strategy under which bonds would be floated not only in the upcoming year, but also a year after that when bonds worth Rs40 billion would be issued. Another proposal under consideration, he said, was that Pakistanis working abroad would be offered dollar bonds to generate resources for running the affairs of the government. For encouraging expatriate Pakistanis, the National Savings Organisation will utilise the services of embassies and commercial attaches abroad and also hold roadshows in key international markets. The government is hoping to generate resources from such papers to meet its budget deficit of four per cent for financial year 2011-12.

The ministry official said the government was also planning Sukuk bonds of state-run corporations against the guarantee of their assets, which would reduce the need for government subsidies for such companies. In this regard, the government is working to determine the value of assets of these enterprises, which will help in the bond issue programme.

Published in The Express Tribune, June 11th, 2011.

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Reader Comments (4)

  • Khalid Rahim
    Jun 11, 2011 - 1:02PM

    An excellent idea provided its covered by an umbrella of Integrity? The government should also clarify the type of bonds such as long term 10-12 years recallable or not, ROI at time of issue. Intermediate term of 5-8 years and short term 3-5 years. Whether these bonds will
    be issued through National Saving Scheme or major banks or both? One important issue is
    the tax rate to be imposed which should maintain a balance for both the purchaser and the government.Recommend

  • shah jee
    Jun 11, 2011 - 7:13PM

    it’d be interesting to see what yield these brings would bring for the investors- considering Pakistan’s risk premium is running higher currently.Recommend

  • Jun 11, 2011 - 8:25PM

    CDS and now this. Are we heading to Greece?Recommend

  • Jun 11, 2011 - 9:38PM

    Sukkuk is good option to opt if Govt. is sincere to make country conditions better. Recommend

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