Pakistan is planning its first eurobond issue for six years and aims to raise $750 million to boost dwindling foreign exchange reserves and shore up the rupee, officials said.

The finance ministry has approached several international banks seeking advice and with a view to appointing one as lead adviser for the launch, a ministry official told news agency AFP.

The move comes with an International Monetary Fund (IMF) team in Pakistan to check progress on reforms tied to a $6.7 billion loan package.

Islamabad has approached Citibank, HSBC and International China Banking Corporation for advice on the bond issue, the ministry official said.

“The banks have been contacted and the final decision will be taken after they come out with their take on the launch,” the official said. “They would advise Islamabad when to launch the bonds, what should be the selling price and volume to the offered.”

Another ministry official confirmed the details. Both spoke on condition of anonymity.

Pakistan raised $750 million and $500 million in its last bond issues in 2007, which were offered with a 7.75 per cent markup and a 10-year term.

The IMF paid the $540 million first installment of the three-year loan deal in September, but future payments depend on the completion of tough economic reforms measured at quarterly reviews.

Pakistan's foreign exchange reserves have fallen alarmingly this year to just $4.2 billion – $300 million below the target set by the IMF for the end of September.

To add to the economic woes, the rupee has also shed 6.2 per cent of its value against the dollar since January.

Pakistan has bumped along at three per cent GDP growth in recent years, less than half the figure experts say is needed to absorb the growing young population into the workforce.

Nevertheless, in August ratings agency Standard and Poor’s gave Pakistan B- status with a stable outlook. Mohammad Sohail, chief executive officer of Topline Securities, said it was a good time for a bond issue, with the IMF deal bedding in, and Pakistan’s other options for raising capital were limited.

“IMF has already granted a loan to Pakistan that also supports the credibility of the country among the world capital markets,” he told AFP. (AFP)