ISLAMABAD: Pakistan has decided to link its digital payment system with the Arab world’s Buna system, operated under the supervision of the Arab Monetary Fund (AMF).
According to a report, the move aims to streamline cross-border payments. However, the system will only allow remittances from overseas Pakistanis to Pakistan and will not permit outward transfers of funds.
Meanwhile, Pakistan is fully prepared to repay $500 million Eurobond maturing on September 30, 2025. This comes as an IMF review mission is scheduled to visit Islamabad to complete the second review of the $7 billion Extended Fund Facility (EFF) program between September 25 and the first week of October.
After a meeting of the National Assembly’s Standing Committee on Finance, State Bank of Pakistan (SBP) Governor Jameel Ahmad told reporters that arrangements had been made for the payment and it would not put pressure on the country’s foreign exchange reserves.
During the fiscal year 2025-26, Pakistan must repay $26 billion in external debt, out of which $3.5 billion has already been paid. Of the remaining amount, $9 billion consists of deposits from friendly countries, which are expected to be rolled over when due.
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Senior officials said the governor’s statement about reserves indicated that Islamabad might either receive new external inflows or the SBP would continue buying dollars from the market to ensure timely payments.
Considering rising debt repayment needs, Pakistan plans to re-enter the international market by issuing new bonds, including Panda bonds in the Chinese market. However, issuing Eurobonds or Sukuk bonds seems unlikely as it depends on global demand and at least a one-notch improvement in Pakistan’s credit rating.
The Panda bond issuance is expected by December 2025, with the first transaction likely to be between $200 million and $250 million.
According to a senior Finance Ministry official, there are two major Eurobond maturities in the pipeline. The first is a $500 million payment on September 30, 2025, for a 10-year bond issued in 2015 at an 8.25% interest rate.
