Islamabad: Governor of the State Bank of Pakistan, Jameel Ahmad, said Pakistan remains in a stronger external financial position despite significant debt repayments. He explained that the country has managed its foreign obligations carefully while continuing to strengthen foreign exchange reserves. At the same time, he highlighted the central bank’s efforts to improve economic stability through strategic market operations.
State Bank has bought $28 billion over the last three years, according to Jameel Ahmad. He shared this information during an informal media interaction in Islamabad. He explained that the central bank purchased dollars from the interbank market to build a financial buffer against external economic shocks and strengthen reserves.
Meanwhile, Pakistan must repay $21.5 billion in external obligations during the current fiscal year. Jameel Ahmad said this amount includes nearly $3.5 billion in interest payments. However, he pointed out that the repayment target remains lower than the $26.5 billion paid during the previous fiscal year.
In July alone, Pakistan paid around $2.2 billion toward external liabilities. The government cleared $1.4 billion in Chinese commercial loans. In addition, it paid approximately $800 million to settle other foreign obligations.
Moreover, Jameel Ahmad said Saudi Arabia has extended its financial support until 2028. This rollover will help Pakistan manage its external financing needs more comfortably. As a result, the country expects less pressure on foreign payments throughout the remaining months of the fiscal year.
The governor also explained that Pakistan expects several major liabilities to continue through rollover arrangements. He said nearly $12 billion of external deposits may receive extensions. Furthermore, lenders are likely to refinance about $3 billion in commercial loans.
Consequently, Pakistan may need to arrange only around $7 billion in actual cash repayments. This lower requirement should reduce pressure on the country’s foreign exchange reserves. Therefore, the government expects smoother debt management from August 2026 through June 2027.
State Bank buys $28 billion as part of a long-term strategy to strengthen Pakistan’s financial position. Jameel Ahmad said these purchases created a stronger reserve buffer against unexpected global economic challenges. He added that this strategy also improved confidence in Pakistan’s external financial outlook.
During the 2025–26 fiscal year, the State Bank purchased nearly $9 billion from the domestic market. This large-scale buying helped increase the country’s foreign exchange reserves. Consequently, Pakistan entered the new fiscal year with stronger reserve levels.
Jameel Ahmad also discussed Pakistan’s outstanding financial obligations with Kuwait. He said the country still owes $250 million, and authorities have continued to roll over this liability since the 1990s. He added that Pakistan continues to manage these obligations through regular financial arrangements.
The governor confirmed that Pakistan fully repaid the $1.4 billion Chinese commercial loan during July 2026. However, Chinese banks have not yet completed the refinancing process. Nevertheless, he expressed confidence that lenders will provide fresh financing within the next few weeks.
He also noted that lower international interest rates have reduced borrowing costs. As global financing conditions improve, Pakistan now spends less on debt servicing. Therefore, the country can manage future repayments more efficiently.
According to the governor, Pakistan’s total foreign exchange reserves reached $22.6 billion by mid-July 2026. The State Bank held around $17.2 billion, while commercial banks maintained another $5.4 billion. These figures reflected stronger reserve levels before recent debt repayments.
Earlier in July, the State Bank’s reserves had climbed to nearly $18.4 billion. Later, reserves declined after authorities paid the Chinese commercial loan and other external liabilities. Even so, officials remain satisfied with the overall reserve position.
State Bank Buys $28 Billion to Protect Pakistan from Future Financial Uncertainty. Jameel Ahmad explained that the central bank continues to strengthen reserves so the economy can absorb unexpected external shocks. He specifically mentioned fluctuations in international oil prices as one of the major risks.
The governor also declined to comment on reports claiming Pakistan had requested a $10 billion balance-of-payments support package from the United States. Instead, he focused on the country’s current repayment strategy. He said the government remains confident about meeting all external obligations during this fiscal year.
Furthermore, Jameel Ahmad addressed concerns regarding future repayments under the IMF program. He said officials will review the repayment schedule for the 2027–28 fiscal year at the appropriate time. Until then, he believes Pakistan’s current external financing plan remains stable and manageable.
Finally, the governor reaffirmed the central bank’s commitment to maintaining healthy foreign exchange reserves. He said the bank will continue purchasing foreign currency whenever market conditions allow. As a result, Pakistan aims to improve economic resilience, strengthen investor confidence, and prepare for future global financial challenges.
