The government has paid a price that is also higher than the current yield on Pakistan bonds maturing in 2027 and trading in the secondary market at around 5.9%. The interest rates were relatively higher than initial expectations, indicating that investors charged a higher risk premium. The government has agreed to pay interest rates which were 5.2% to 6.5% higher than the prevailing US Treasury rates despite an overall low global interest rate environment. In November 2017, Pakistan raised $2.5 billion from global capital markets through a five-year Sukuk and 10-year Eurobonds. The reserves remain low despite the State Bank of Pakistan has offered abnormally high interest rates to overseas Pakistanis investing in government securities.

Source: The Express Tribune March 31, 2021 03:55 UTC