Pakistan raises $370m loan; UAE banks lead

The Pakistan government has raised $370 million (Dh1.35 billion) through syndicated term loan and Murabaha financing facility with the help of UAE banks.

It was the largest hybrid – Islamic and conventional – commercial financing this year by the country. Emirates NBD Capital, the global investment banking arm of Emirates NBD bank, acted as the global coordinator for the facility.

The facility was over-subscribed by around 1.2 times, garnering a strong response from a syndicate of leading local, regional and international banks comprising Emirates NBD Bank, Sharjah Islamic Bank, Mashreq, Commercial Bank of Dubai, Allied Bank Limited Bahrain and United Bank Limited were mandated lead arrangers and bookrunners.

The facility will further improve the South Asian country's foreign exchange reserves, which have been steadily rising over the last few months as remittances from the country's diaspora have been consistently remaining strong.

Pakistan’s foreign exchange reserves jumped $553 million or 2.85 per cent to $19.9 billion in the week ended on November 6 on the back of official inflows, the country's central bank said. The State Bank of Pakistan's forex reserves grew $558 million to $12.74 billion.

Workers' remittances remained above $2 billion for the fifth consecutive month in October 2020, amounting to $2.3 billion last month, increasing by 14.1 percent compared to October 2019.

During Jul-October FY 2021, workers' remittances increased to $9.4 billion, recording a growth of 26.5 per cent over the same period last year.

Improvements in Pakistan's forex market structure and its dynamics, efforts under the Pakistan Remittances Initiative (PRI) to formalise the flows and limited cross-border travelling contributed to the growth in remittances.

waheedabbas@khaleejtimes.com

• Pakistan