The Governor State Bank of Pakistan (SBP), Jameel Ahmad vows to focus on building FX reserves amid curtailed external debt liabilities

The Governor State Bank of Pakistan (SBP), Jameel Ahmad, Monday, said that Pakistan, with a prudent debt management strategy, has successfully decreased the amount of external debt payable during current fiscal year enabling the central bank to focus on foreign reserve building

KARACHI, (APP - UrduPoint / Pakistan Point News - 27th Jul, 2026) The Governor State Bank of Pakistan (SBP), Jameel Ahmad, Monday, said that Pakistan, with a prudent debt management strategy, has successfully decreased the amount of external debt payable during current fiscal year enabling the central bank to focus on foreign reserve building.

Pakistan has to settle down $21.5 billion of external debt in FY27 as compared to debt servicing of $26.5 billion in FY26, he said while addressing a press conference held here to announce the decisions of the Monetary Policy Committee (MPC).

Pakistan, during the fiscal year 2025-26, has to settle external debt of $26.5 billion including interest payments of around $ 4 billion, he said, adding that entire amount of the external debt payable during the FY26 was settled down successfully and despite repayment of loans the central bank managed to increase the foreign reserves by $ 5 billion.

In the current fiscal year, he said, the country has to settle down $21.5 billion of external debt which included interest payments of $3.5 billion. Out of the around $18 billion of principal amount, a significant amount of $6.5 billion has already been settled down while a major portion is expected to be rolled over or refinanced, he stated.

In FY27, Pakistan has to pay back around $7.5 billion as compared to $11 billion debt servicing in FY26, reflecting a remarkable decrease in payable external debt during the current fiscal year, he noted.

The overall public sector external debt was $82 billion in 2023 and the amount is maintained at almost the same level in preceding 3 years while short term loans were replaced with long term loans, he informed, adding that SBP has also narrowed down its forward liabilities by $5 billion during the FY26 and the it has to settle liabilities of $900 million during FY27.

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He vowed to completely drop off the forward liabilities of the central bank to zero for improving the risk profile of the country, saying that FX reserve build up, debt management, available fiscal space and consolidation policies of the government have resulted in improvement of the country's international ratings and Pakistan secured better rates of bonds issued in the previous fiscal year.

Pakistan’s Euro Bond was traded at 7% rate in recent issues and further decline in the rate is expected on the basis of significant economic developments and upgraded international ratings, he maintained.

Responding to a media query regarding internal debt, he said that the volume of the internal public sector debt has somehow increased but its growth rate in relation to GDP growth has slowed down as compared to previous fiscal years.

The stability in debt level as well as quality of foreign reserves helped SBP to buy dollars from the inter bank market and as many as $28 billion were acquired from the market in the previous 3 years, he said, adding that the purchased foreign exchange reserves were used for debt repayments and building FX reserves.