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ISLAMABAD — Pakistan will redeem a $1 billion international bond on Dec. 2, three days ahead of its maturity date, Pakistan’s central bank governor said Friday at a press briefing.

There has been growing uncertainty over Pakistan’s ability to meet its external financing obligations with the country amid an economic crisis and recovering from devastating floods that killed more than 1,700 people.

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The redemption of the bond, which matures on December 5, amounts to $1.08 billion, Jameel Ahmad, governor of the State Bank of Pakistan, said at a press briefing, according to two analysts present.

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Ahmad added that funding has been aligned from multilateral and bilateral sources to ensure repayment will not affect foreign exchange reserves. An immediate inflow of $500 million was expected next week on Tuesday from the Asian Infrastructure Investment Bank, he said.

Pakistan’s reserves with the central bank stood at $7.8 billion as of November 18, barely enough to cover a month’s imports.

Ahmad said reserve levels will depend on the continued achievement of expected inflows and the renewal of loans from friendly countries, but added that he was confident the reserve figure would be “much higher” by the end of the year. exercise in June 2023.

He told the briefing that he expects external financing needs to be met on time due to influxes from international lenders. He pointed out that, despite disbursements of $1.8 billion in November, reserves remained stable.

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The International Monetary Fund (IMF) said earlier this week that Pakistan’s timely finalization of a recovery plan after devastating floods is essential to underpin discussions and continued financial support from multilateral and bilateral partners.

Pakistan is currently in an IMF bailout program, which it entered in 2019, but a firm date for the ninth review to release much-needed funds is pending even as it battles a widespread economic crisis, with inflation high for decades and low reserves. .

The central bank raised its benchmark rate by 100 basis points to 16% on Friday in an unexpected step to ensure that high inflation does not take hold. (Reporting by Gibran Peshimam Editing by Raissa Kasolowsky, William Maclean)

Pakistan to repay $1bn bond early

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