KARACHI: The friendly countries have rolled over around USD 6 billion in July 2026, providing an early boost to Pakistan’s external financing position and supporting efforts to manage its debt servicing obligations for the current fiscal year.
Addressing a press conference here on Monday, Governor State Bank of Pakistan (SBP) Jameel Ahmad informed that Pakistan’s external debt servicing obligations are projected at USD 21.5 billion for FY27 compared to USD 26.5 billion in FY26. Of the total amount, USD 3.5 billion comprises interest payments, while the remaining USD 18 billion relates to principal repayments.
“The projected external debt servicing this fiscal year is about USD 5 billion lower than the previous year, reflecting an improved debt profile, lower financing costs, and a shift towards longer-term and multilateral financing arrangements,” he added.
READ MORE: Pakistan’s external debt rose $92.2bn in FY26, reveals Economic Survey
He said that around USD 10-11 billion of the principal repayments are expected to be rolled over or refinanced, reducing the net repayment requirement to about USD 7.5 billion compared to USD 11 billion in FY26.
Jameel Ahmad further disclosed that nearly USD 6 billion of the projected rollover amount for FY27 has already been settled or arranged in July 2026. Actual cash outflows for debt repayments are expected to remain substantially lower than the previous year debt servicing. Pakistan is estimated to require only around USD 7 billion in actual external debt payments during FY27, compared with approximately USD 11 billion in FY26.
He said Pakistan has successfully managed its FY26 external debt obligations through a combination of repayments, rollovers from friendly countries, and re-deposits. A significant portion of the FY27 debt servicing requirements is also expected to be met through rollovers and refinancing arrangements.
The improvement comes as commercial borrowing is being replaced with long-term financing and multilateral loans, helping reduce refinancing risks and strengthen the country’s external debt position, he added.
Governor SBP informed that Pakistan’s federal government external debt, which stood at around USD 82 billion in FY22, has broadly remained at that level despite significant repayments over the past few years. Meanwhile, the maturity profile of the country’s debt stock has improved considerably, reducing short-term repayment pressures.
SBP has also substantially reduced its forward liabilities. The SBP’s forward liabilities have declined from USD 5.8 billion to around USD 900 million by end of June 2026. He hoped that the reduction in forward liabilities is expected to further strengthen Pakistan’s reserve position and enable the SBP to become a net supplier of foreign exchange liquidity to the market when required.
Governor SBP said that the improvement in Pakistan’s debt and external sector indicators has contributed to recent upgrades in the country’s sovereign credit outlook. Pakistan’s international bond yields have declined significantly, with the 10-year bond yield falling to around 7.7 percent from nearly 35 percent previously, reflecting improved investor confidence.
In addition, the government has also successfully improved financing at around 7 percent through an international bond issuance a few months ago, considerably lower than the rates Pakistan faced during periods of economic stress.
Copyright Business Recorder, 2026
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