ISLAMABAD: Pakistan repaid $2.2 billion in external debt in July, including a $1.4 billion commercial loan from China, as part of efforts to reduce debt-servicing pressure and strengthen the country’s external financial position, State Bank of Pakistan (SBP) Governor Jameel Ahmad said.
Speaking to reporters after attending a meeting of the Senate Standing Committee on Finance, Ahmad said Pakistan’s external debt repayment obligations for the current fiscal year have declined from $26.5 billion to $21.5 billion, while about $3.5 billion will be paid in interest.
The SBP governor said the government expects the $1.4 billion Chinese commercial loan to be refinanced by Chinese banks within the next few weeks, although the rollover has not yet been completed.
He added that Pakistan will also require the rollover of about $12 billion in deposits and loans from Saudi Arabia and China during the fiscal year.
Ahmad said the central bank purchased $28 billion from the foreign exchange market over the past three years to build Pakistan’s foreign exchange reserves. Of the $2.2 billion repaid in July, $1.4 billion was used to settle the Chinese commercial loan, while the remaining $800 million was allocated to servicing other external liabilities.
The governor said the government’s strategy of managing external repayments while increasing foreign exchange reserves is aimed at easing financing pressures and maintaining macroeconomic stability.