Major Chunk of FY25 Foreign Debt Already Repaid, Confirms SBP Chief

Major Chunk of FY25 Foreign Debt Already Repaid, Confirms SBP Chief

Gov. State Bank of Pakistan (SBP) Jameel Ahmad on Monday stated that the “bulk of” the country’s foreign debts for the current fiscal year have already been paid.
At a press conference to announce the primary interest rate in the SBP chief’s press conference, the SBP chief also stated that the Monetary Policy Committee (MPC) came to the cut of 100 basis points, considering the future inflation forecast and other changes.
In response to a question after the briefing, the SBP governor stated that Pakistan’s foreign debt was $26.1 billion and was due to be repaid in the fiscal year in question. Of this, more than $16 billion of loans were either rolled over or paid back.

“An amount of $12.3 billion is rollovers agreed with the lenders, whereas $3.7 billion are commercial loans, which will also be repaid and refinanced,” the official said.
The remaining $10-10.1 billion amount can be repaid for the current fiscal year. “A total of $6.4 billion has been paid back. Therefore, he added that the remaining sum of $3.6-3.7 billion has to be paid” over the remaining financial year.
The head of the central bank added to the report that the “bulk of the debt” is already paid back, and further flows from multilateral lenders are anticipated in the next few months.
In response to a question, Ahmad stated that in the past two months, i.e., December and January, $2.3-2.4 billion has been paid back.
Despite the loan payment, the governor anticipates that foreign exchange reserves will be about $13 billion by the end of June.
His report coincides with his report, which states that the MPC of the central bank decided Monday to reduce its rates by 100bps to 12%, down from 13 percent. The cut was in line with market forecasts.
The central bank cut rates by 1,000bps, down from a record high of 22 percent in June 2024, among the most frenzied decisions of central banks in emerging markets. This surpasses the 625bps rate cuts in the year 2020 during the COVID-19 pandemic.