Pakistan issues new low-rate, long-term bond
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The Finance Ministry on Thursday issued a low rate and long term bond.
Finance Ministry officials told the media at a briefing that bonds worth Rs38 billion have been issued instead of Rs140 billion. The ministry said that local bonds have been issued for a duration of three to 20 years. It said that 8.19 percent interest was paid on a three-year bond worth Rs16.1 billion. Interest rate on a Rs12 billion bond for 15 years will be 9.91 percent. Interest rate on a Rs10 billion bond for 15 years will be 10.42 percent. On a Rs550 million bond for 10 years, interest rate would be 8.94 percent.
The Finance ministry said that past governments acquired loans at a policy rate, which was 4.5 percent higher than the normal policy rate. He said that banks were given favour in the past. This is the first time since 2011 that a bond has been introduced for a 15-year term. The Finance Ministry said that a bond was issued after 2017 for a term of 20 years. Also, a Professional Data Management Wing has been set up at the Finance Ministry. The government would issue Rs140 billion local bonds every month. These bonds would be taken at the lowest interest rates, according to officials of the Finance Ministry. The Finance Ministry said that it has stopped obtaining loans from the banks. This has led to a decrease in the number of printing of new currency notes.