SBP governor says lower debt obligations and reserve strategy support economic stability
ISLAMABAD: Pakistan has repaid a $1.4 billion commercial loan to Chinese banks, while refinancing is expected to be completed within the next few weeks, State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Wednesday.
Speaking to reporters after attending a meeting of the Senate Standing Committee on Finance at Parliament House, Ahmad said Pakistan made external debt repayments totaling $2.2 billion during July 2026.
According to the SBP governor, the repayments included the $1.4 billion commercial loan to Chinese lenders, while the remaining $800 million was used to settle other external financial obligations.
He added that the refinancing facility from Chinese banks had not yet been received but was expected shortly after a brief processing period.
Debt repayments decline this fiscal year
Ahmad said Pakistan’s external debt repayment requirement has declined from $26.5 billion to $21.5 billion, easing pressure on the country’s finances during the current fiscal year.
He also noted that approximately $3.5 billion of the remaining obligations would be allocated to servicing interest payments.
According to the central bank chief, the lower repayment burden is expected to improve Pakistan’s external financing position compared with previous years.
He expressed confidence that the country’s debt management strategy would help maintain financial stability while supporting broader economic objectives.
Foreign exchange reserves remain priority
The SBP governor revealed that the central bank has purchased $28 billion over the past three years to strengthen Pakistan’s foreign exchange reserves.
He said the government would continue pursuing policies aimed at increasing reserve levels while preserving macroeconomic stability.
Ahmad further stated that Pakistan would require the rollover of nearly $12 billion in deposits from Saudi Arabia and China to support its external financing needs.
He added that the authorities remain focused on ensuring sufficient foreign exchange liquidity to meet future repayment obligations and maintain investor confidence.
The governor said ongoing reserve accumulation, expected refinancing from Chinese banks and continued support through deposit rollovers would collectively strengthen Pakistan’s external sector and reduce financial pressures during the current fiscal year, while helping sustain economic stability and improve the country’s overall financial outlook.
