Pakistan has paid approximately $16 billion in interest on foreign loans over the past four years, highlighting the country’s substantial debt servicing obligations.
State Bank of Pakistan (SBP) Governor Jameel Ahmed revealed the figures during a press conference following the monetary policy announcement on Monday, October 26, 2026.
According to Ahmed, Pakistan paid an average of $4 billion annually in interest during this period.
Pakistan’s External Debt Reaches $107 Billion
The SBP governor confirmed that Pakistan’s total external debt currently stands at approximately $107 billion.
He explained that the country’s foreign debt had already exceeded $100 billion in 2022.
Despite substantial interest payments, external debt increased by only $5 billion to $6 billion over four years.
Ahmed said annual debt growth averaged approximately $1 billion to $1.25 billion.
In comparison, external borrowing increased by around $6.5 billion annually between 2015 and 2022.
SBP Uses Foreign Exchange Purchases to Repay Interest
The governor revealed that approximately $10 billion to $11 billion in interest payments came from dollars purchased through the domestic market.
The central bank acquired more than $30 billion during the period.
These purchases also helped strengthen Pakistan’s foreign exchange reserves.
Reserves increased from approximately $3 billion in early 2023 to around $21.5 billion.
Pakistan Targets Lower Interest Payments
Ahmed expects annual foreign debt interest payments to fall below $3 billion next year.
He also projected foreign exchange reserves reaching $23 billion by December 2026 and $25 billion by June 2027.
Meanwhile, the SBP increased its benchmark policy rate by 50 basis points to 12%.
The figures underline Pakistan’s ongoing efforts to manage foreign debt and strengthen financial stability.
