Pakistan Pays $5.66 Billion in Interest on International Bonds Over 19 Years
In the past 19 years, Pakistan has expended a significant $5.66 billion in interest on international Euro and Sukuk bonds. This substantial financial commitment highlights the country’s ongoing obligations to its global creditors.
Alongside these interest payments, Pakistan has also repaid $7.50 billion of the principal sum during this period. Currently, Pakistan still owes $6.8 billion, which must be settled by June 2024. This information was revealed during a briefing by officials from the State Bank and the Ministry of Finance to the Senate Standing Committee on Economic Affairs.
The latest international bond issued by Pakistan was in January 2022, following a $2.5 billion bond issuance in April 2021. The interest rates on these bonds were notably high, ranging from 5.75% to 8.75%, reflecting the higher cost of borrowing.
Officials have indicated that the US Federal Reserve might soon reduce interest rates, a trend also expected in European, British, and Canadian markets. This potential decrease could lead to a reduction in Pakistan’s policy rate. However, the Ministry of Finance has clarified that no new bonds will be issued until there is a further decline in global interest rates.
