Pakistan has repaid $700 million to the China Development Bank under a commercial loan agreement, leading to a decline in foreign exchange reserves held by the State Bank of Pakistan to $15.5 billion according to official sources.
The loan had previously been rolled over for three years, but the latest repayment comes at a sensitive time for the economy. Government officials indicated that another $1 billion loan from the same bank will mature in June with authorities considering early repayment and refinancing under potentially improved terms.
The development coincides with an upcoming visit by the International Monetary Fund scheduled from February 25 to March 11 to review Pakistan’s performance under its lending program. The IMF team will begin its engagements in Karachi with formal talks set to follow.
Pakistan continues to rely on financial support from China, the United Arab Emirates and Saudi Arabia including loans and deposits critical for reserve stability.
The Ministry of Finance reported that external public debt reached $91.8 billion by June 2025. Prime Minister Shehbaz Sharif emphasized reducing dependence on borrowing, while Finance Minister Muhammad Aurangzeb stated that immediate financing needs have been met.
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