ISLAMABAD - Pakistan is closely monitoring international capital market before issuing Eurobond to raise at least one billion dollars to sustain its depleting foreign exchange reserves.

The government would issue the Eurobond if investors show interest in investing in bond. "The total amount Pakistan will have to pay on its external debt is $3billion before June this year," a top official of the ministry of finance said.

He further said that major part of the amount would be raised by tapping the international market. "We are expecting to generate at least one billion dollar. However, exact amount will be decided after a response from the international market," he added.

Pakistan in November last year had successfully executed $1.0 billion five years Sukuk and $1.5 billion ten years Eurobond transactions at a profit rate of 5.625percent and 6.875 percent respectively.

The order book for Pakistan's sovereign papers was over $8 billion. However, the government decided to pick up only $2.5 billion in order to ensure low final yields on the Sukuks and Eurobonds.

The government had already stated that State Bank of Pakistan's held foreign exchange reserves would remain at $12.5 billion by June this year. "The government will have to make some borrowing before June 2018 to repay previous loans," the Adviser to PM on Finance Dr Miftah Ismail said few days back.

Pakistan reserves held by SBP are stood at $12.1 billion. The reserves are tumbling due to widening of current account deficit and repayment of previous loans.

The current account deficit is expected to widen to $15.7 billion (4.8 percent of GDP) this year according to the projection of International Monetary Fund.

Another official said that government has also another options to raise $3 billion, which included loans from the commercial banks and loans from friendly countries including China.

He said government had already borrowed massively from the commercial bank, which stood at $1.8billion during seven months (July to January) of the current fiscal year. The government had projected only $1 billion borrowing from the commercial banks during the entire ongoing financial year.

However, the government had gone beyond the limit in seven months to sustain its foreign exchange reserves.

The incumbent government is borrowing massively from the external sources during its tenure.

The IMF has projected that Pakistan's external debt would increase to $103.9 billion by June 2019 from estimated level of $93.3 billion of June 2018.

Similarly, the IMF in its report stated that External financing needs are expected to rise from $21.5 billion (7.1 percent of GDP) in FY 2016/17 to around $45billion by FY 2022/23 (9.9 percent of GDP).

External financing are estimated to enhance due to elevated current account deficit and rising external debt service, in part driven by CPEC-related outflows (loan repayments and profit repatriation).