Government raises Rs 75.43 billion via fixed and variable rates

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KARACHI: The government raised Rs 75.439 billion on Thursday through the auction of five-year fixed and variable rental rates. Government of Pakistan Ijara Sukuk, in order to help finance the budget deficit.

The government raised 67.189 billion rupees through the auction of Ijara Sukuk (variable), while the amount realized through the fixed rental rate of Sukuk was 8.250 billion rupees, according to the result of the central bank auction .

The cut fixed rental rate was 9.45%.

Last month, the State Bank of Pakistan released the auction schedule for the Sukuk issuance based on the Ijara for five years.

The pre-auction target for variable and fixed rental rate Sukuks between January and March 2021 is set at Rs 150 billion.

Bankers said the latest result showed increased demand for Sharia-compliant instruments in the market, evident from the yield on Sukuk fixed-rate instruments was 9.45%, which was higher than the yields. previous ones.

The Pakistani sukuk market has seen a significant increase in volumes and emission values ​​in 2020.

Ijara Sukuk’s issuance on variable and fixed rental rates amounted to Rs 561 billion last year.

In addition, Pakistan Energy Sukuk II worth Rs 200 billion has also been issued which represents a total of Rs761 billion Sukuk or Islamic Bonds eligible for Statutory Liquidity Ratio (SLR) in 2020.

The government raised funds through five new fixed-rate Ijara Sukuk issues. Instead of issuing a new sukuk, it had generated funding through the reopening of four existing variable rate sukukes. There were three fixed rate sukuk issues via reopening during the year under review. Sukuk’s offerings gained momentum in the country after a five-year hiatus. There was no single issue of Ijara Sukuk between 2016 and 2019. The government issued the first of its kind a Pakistan Energy Sukuk of 200 billion rupees in March 2019 to tackle the problem of circular debt. in the electricity sector.



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