ISLAMABAD:Pakistan has delayed launch of $3 billion worth Eurobonds for at least six months but is likely to issue a diaspora bond after its rules have been approved by the federal cabinet.The government is now in a position to launch the Pakistani Diaspora bond within a month to raise funds from overseas Pakistanis to meet the country’s financing requirements, said sources in the Finance Ministry. The cabinet approved the rules last week.But the Finance Ministry has put on hold launch of $3 billion Eurobonds and Sukuk bonds, at least for six months, the sources said. The Eurobonds launch has been withheld due to delay in reaching an agreement with the International Monetary Fund (IMF) for a bailout package.In the budget estimates, the government had planned raising $3 billion by floating sovereign bonds during the fiscal year 2018-19. The $1 billion Eurobond that the last Pakistan Muslim League-Nawaz (PML-N) government issued in 2014 is maturing in April next year, which the authorities initially wanted to return by launching another Eurobond.In case Pakistan still decides to go to the international capital markets to float bonds, it may have to pay at least 1% to 1.5% higher price to the investors. Talking to Finance Minister Asad Umar said Pakistan can meet its financing needs without floating Eurobonds. The minister also confirmed that the federal cabinet has approved rules of the Pakistani Diaspora Bond.The Finance Ministry was confident that it would still meet the financing requirements with the help of friendly countries and raising commercial bank loans. The financing requirements projections have also been lowered due to contraction in the current account deficit.In case, some of the planned financial assistance from the friendly countries does not reach in time, the government will review its strategy on Eurobond by April, the sources said. Pakistan has requested China, Saudi Arabia and United Arab Emirates for a big financial assistance package.Pakistan’s central bank reserves have slid to $7.5 billion by end of last month despite availing $1 billion loans from Saudi Arabia. The gross external financing needs that were earlier estimated at $31 billion for this fiscal year by the Finance Ministry have now been downward revised to nearly $25 billion.The downward revision was on the hope of curtailing the current account deficit to $12 billion to $13 billion. This is down from last year’s level of $19 billion.The Overseas Pakistani workers have remitted $9.1 billion in the first five months (July to November) of this fiscal year –up by 12.6% or $1 billion, according to the State Bank of Pakistan (SBP).The sources said the administrative and policy actions taken by the SBP since January this year have started yielding results. The 34% currency devaluation and 4.25% increase in interest rates since January is higher than the SBP’s initial decision that it shared with the prime minister two months ago.The sources said Pakistanis Diaspora bonds will be issued for a tenor of 3 years and 5 years at a fixed interest rate of 5% and 5.5% respectively. The Finance Minister has directed the central bank to prepare marketing strategy.The government aims at overseas Pakistanis residing in the United Kingdom and North America to raise the funds. Before taking oath for the office of the finance minister, Asad Umar had described diaspora bond as his preferred option to deal with Pakistan’s external sector crisis.Pakistan has decided to launch the diaspora bond under the Public Debt Act, 1944. The government’s decision to float bond under the 1944 law will help it save at least 1.5% cost that it otherwise had to pay to intermediaries.The sources said the government will not require services of financial advisers. The SBP will maintain a general ledger to handle the investments in the bonds. The diaspora bonds will not be registered either in the US or in Europe. There is a provision that these bonds could be listed at Pakistan Stock Exchange.The government will receive funding only through banking channels, which will also address the issue of transparency and ill-gotten money stashed abroad.The finance minister initially wanted to launch the diaspora bond in Oct but due to lack of preparedness and the PM’s desire to launch the Diamer-Bhasha dam appeal first, the launch was delayed.