ISLAMABAD: Chairman of the Senate Standing Committee on Finance Senator Saleem Mandviwalla has termed the issuance of $1 billion Islamic bonds (sukuk) “a wrong decision taken at the wrong time”.
In a statement issued on Saturday, he criticised the issuance of $1bn sukuk in the international market and said that the hurried decision was an act of immaturity by the government.
Senator Mandviwalla said that the federal government issued sukuk at a time when “investor sentiment was against Pakistan mainly due to the recent spate of tensions along the LoC and the eastern border and it was expected that the rates will be high.” He said that the federal government also blamed the higher rate on Pak-India border tensions.
“This is correct, but who forced them to issue the bond at this time at a higher rate,” he said, adding that it would have been better to wait for a more suitable time.
“We are surprised that Eurobonds which carry sovereign guarantees were sold at 8.25pc interest rate and sukuk, which are guaranteed by assets, are sold at 5.5pc. Something is seriously wrong.”