Pakistan repays $1 billion international bond: State Bank

ISLAMABAD: The State Bank of Pakistan (SBP) on Saturday announced that Pakistan successfully repaid a $1 billion international bond on Friday.

In a post on social media platform X (formerly Twitter), the SBP stated that repayment included both, the principal amount and accrued interest. The payment was made to the agent bank that will then distribute the funds to the bondholders.

An international bond is a debt security issued by a country’s government in a foreign currency, typically to raise funds from international investors. In this case, Pakistan issued a $1 billion bond in the global financial markets, attracting investors from around the world.

Read more: Pakistan strikes solar power deal with Chinese firm

When a government issues bonds, it agrees to repay the principal amount borrowed at a specified date in the future, known as the maturity date. In addition to the principal amount, the government also pays interest to bondholders at regular intervals, usually semi-annually or annually.

The repayment made by the State Bank of Pakistan includes both the original amount borrowed ($1 billion) and the accrued interest accumulated over the bond’s lifespan.

The successful repayment of the international bond shows that Pakistan can be trusted to pay its debts. This makes investors feel more confident about investing in Pakistan.

Read more: Wheat procurement campaign starts in Punjab

Paying back bonds on time is also important because it helps Pakistan keep a good reputation in the global financial world. This reputation helps attract more investments in the future and allows Pakistan to borrow money from global markets when needed.