KARACHI: Pakistan plans to raise Rs 80 billion ($932 million) by selling Islamic bonds in the domestic market next month, the State Bank of Pakistan said on Friday, as the government seeks to cut its fiscal deficit.
The issue, titled the Government of Pakistan Ijara Sukuk, will be a three-year bond. In the first auction on November 8, the government aims to raise Rs 40 billion, with settlement on November 15. A second auction will be held on December 13 to raise the remaining Rs 40 billion with settlement on December 20.
The government aims to raise revenue and narrow its fiscal deficit which stood at 6.3 percent of gross domestic product in fiscal 2009-10, well above a target agreed with the International Monetary Fund of 5.2 percent. The government expenditure is also likely to rise following the devastating floods in August which caused nearly $10 billion in damages.