SBP Governor Confident To Settle $25.9 Billion External Debt Repayments Comfortably In FY26

Pakistan with its rising forex reserves and promising outlook, is financially in a comfortable position to manage external debt repayments of $ 25.9 billion during fiscal year 2025-26, said Governor State Bank of Pakistan, Jameel Ahmed

KARACHI, (UrduPoint / Pakistan Point News - 30th Jul, 2025) Pakistan with its rising forex reserves and promising outlook, is financially in a comfortable position to manage external debt repayments of $ 25.9 billion during fiscal year 2025-26, said Governor State Bank of Pakistan, Jameel Ahmed.

Addressing a press conference on Wednesday held here for announcement of monetary policy decisions, Jameel Ahmed informed that State Bank FX reserves which closed at $14.5 billion with an increase of $5 billion in the outgone year are projected to rise to $15.5 billion by end of the December 2025 and a target has been set to increase the reserves to $17.5 billion by end of the fiscal year 25-26. Potential inflows from Euro Bond and other resources may further inflate the reserves, he added.

The central bank has to settle external debts amounting to $26 billion- comprising $22 billion of principal and $4 billion interest- during the FY25-26 through roll overs of $16 billion and repayment of $10 billion, he informed, adding that our foreign exchange reserves are sufficiently more than volume of repayable external debt and we will not face any difficulty in repayment.

The total public debt in FY25 remained at around $ 100 billion, a level being successfully maintained from June 2022 and no debt burden has been added during the past three years while maintaining a balance in repayments and new debt and changing the composition of acquired loans, SBP Governor said.

Among the external debt, the share of long term and low cost multilateral loans, received from World Bank, Asian Development Bank and other development partners, was 43% in FY22, and it has been raised to 50% in FY25, he stated, adding that change in composition of debt will result into lower interest rate, extended repayment periods and improved repayment capacity.

Revival of the national economy reflected by increasing forex reserves, current account surplus, declining inflation and upgraded global ratings has enhanced Pakistan’s credibility and our bonds are trading at premium in the international financial market, the SBP governor explained, maintaining that it would further enhance debt management capacity and new loans could be borrowed at lower rates.

The SBP Governor stated that economic growth has started picking up in FY24 with a 2.7% increase and this year we are projecting GDP growth in the range of 3.25 to 4.25 percent and workers remittances are expected to surge above $40 billion, while current account will range between a fair balance at 0% to a deficit of 1% owing to surging imports.