Bulk of Pakistan’s foreign debt repayment for FY25 already repaid: SBP chief

Governor State Bank of Pakistan (SBP) Jameel Ahmad Monday said “bulk of” the country’s foreign debt for the ongoing fiscal year has already been paid.

In a press conference held to announce the key interest rate, the SBP chief also said the Monetary Policy Committee (MPC) decided on a cut of 100 basis points, keeping in mind the inflation outlook and other developments.

Meanwhile, responding to a query after the briefing, the SBP governor said Pakistan’s foreign debt that was due to be repaid during the current fiscal year was $26.1 billion. Out of this, an amount to the tune of $16 billion in loans will either be rolled or repaid.

“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,” he said.

Meanwhile, the remaining $10-10.1 billion is the total repayable for this fiscal year. “An amount of $6.4 billion has already been repaid. Thus, the remaining amount of $3.6-3.7 billion needs to be repaid” during the remaining fiscal, he said.

The central bank chief added that the “bulk of the debt” has already been repaid, while further inflows are expected from multilateral lenders in the coming months.

Responding to a query, Ahmad said in the last two months i.e. December-January, $2.3-2.4 billion has been repaid.

Despite the repayment, the governor expects foreign exchange reserve to clock in at around $13 billion by June end.

His briefing comes as the MPC of the central bank on Monday decided to cut its key policy rate by 100bps to 12% from 13%. The decline was in line with market projections.

The central bank slashed rates by 1,000bps from an all-time high of 22% in June 2024, in one of the most aggressive moves among central banks in emerging markets and topping the 625bps in rate cuts it did in 2020 during the COVID-19 pandemic.