Islamabad: Pakistan repaid $2.2 billion in external debt during July, including a $1.4 billion commercial loan to China, which is expected to be refinanced within the next few weeks, according to State Bank of Pakistan (SBP) Governor Jameel Ahmad.
Speaking to journalists outside Parliament House after attending a meeting of the Senate Standing Committee on Finance, the SBP governor said the government is continuing its strategy to reduce debt repayment pressure and strengthen the country’s foreign exchange reserves.
Jameel Ahmad said Pakistan’s total external debt servicing requirement for the current fiscal year has declined from $26.5 billion to $21.5 billion, while $3.5 billion of that amount relates to interest payments.
He stated that Saudi Arabia and China are expected to roll over approximately $12 billion in financial support, which will help ease Pakistan’s external financing requirements.
The governor confirmed that Pakistan has already repaid the $1.4 billion commercial loan to Chinese banks, although the refinancing has not yet been completed.
He expressed confidence that Chinese financial institutions are expected to provide the financing again after a delay of a few weeks, allowing the funds to return to Pakistan.
According to Jameel Ahmad, of the $2.2 billion paid in July, $1.4 billion was used to repay the Chinese commercial loan, while the remaining $800 million was allocated toward servicing other external debt obligations.
The SBP governor also revealed that the central bank has purchased $28 billion in foreign exchange over the past three years as part of efforts to strengthen Pakistan’s foreign currency reserves.
He said these measures are intended to improve external sector stability, support foreign exchange liquidity, and reduce vulnerabilities arising from large debt repayments.
The governor emphasized that Pakistan remains focused on managing its external financing needs through prudent debt management, reserve accumulation, and continued cooperation with international financial partners.
The expected refinancing of the Chinese loan, along with the anticipated rollover of financial facilities from China and Saudi Arabia, is expected to play an important role in maintaining Pakistan’s external account stability during the current fiscal year.
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