ISLAMABAD, Jan 31 (Reuters) - Cash-strapped Pakistan on Thursday launched a bond scheme for its citizens living overseas, aimed at generating funds in foreign currencies to help bridge a balance of payment crisis.
The Build Pakistan Certificates scheme offers returns in dollars on three- and five-year paper yielding 6.25 percent and 6.75 percent, respectively, the finance ministry said.
The minimum investment is $5,000 with no upper limit, it said. Pakistan’s global diaspora numbers around 7.6 million, according to government data.
The country faces an economic crisis due to depleting foreign reserves and a widening current account deficit
It has secured some loans and oil on deferred payments from Saudi Arabia and United Arab Emirates, and is in negotiations for an IMF bailout.
“There was record high fiscal deficit. We knew as outsiders that country is crumbling. As insiders we saw the extent of how bad the affairs were,” Prime Minister Imran Khan said at the televised launch of the bond programme.
Khan urged investors in the scheme to take their interest in local currency rather than dollars.
The finance ministry said the certificates would be exempt from withholding tax and Islamic charity deductions.
They are the second such scheme introduced this week after authorities announced plans for an Islamic bond to generate 200 billion rupees ($1.45 billion) to help pay down power sector debts.
$1 = 137.6000 Pakistani rupees Reporting by Asif Shahzad; editing by John Stonestreet