Pakistan has repaid a $1.4 billion commercial loan to Chinese banks as the State Bank expects refinancing within weeks, while external debt obligations continue to decline.
ISLAMABAD: Pakistan has repaid a $1.4 billion commercial loan to Chinese banks, marking another significant step in managing its external debt obligations, according to State Bank of Pakistan (SBP) Governor Jameel Ahmad.
Speaking to reporters after a meeting of the Senate Standing Committee on Finance at Parliament House on Wednesday, Ahmad said Pakistan repaid $2.2 billion in external debt during July 2026. The payments included the $1.4 billion Chinese commercial loan, while the remaining $800 million was used to settle other external liabilities.
The SBP governor said refinancing from Chinese banks had not yet been received but was expected within the next few weeks. He expressed confidence that the financing would be disbursed after a short delay, helping support Pakistan’s foreign exchange reserves.
Ahmad also disclosed that the central bank has purchased $28 billion over the past three years to strengthen the country’s foreign exchange reserves and improve external financial resilience.
He said Pakistan’s total external debt repayment requirement for the current fiscal year has declined from $26.5 billion to $21.5 billion, reducing pressure on the national economy. Of the remaining obligations, approximately $3.5 billion will be used for interest payments.
The SBP governor said the government remains committed to increasing foreign exchange reserves while maintaining external financial stability. He added that Pakistan would require the rollover of nearly $12 billion in deposits from Saudi Arabia and China, a move considered important for supporting the country’s external financing needs.
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