External debt servicing to ease to $21.5bn in FY27: SBP

July 30, 2026 (MLN): Pakistan's external debt servicing burden is projected to ease significantly in fiscal year 2026-27, with total repayments estimated at $21.5 billion, nearly $5 billion lower than the previous fiscal year, as a substantial portion of maturing obligations is expected to be rolled over or refinanced rather than repaid in cash.

Addressing journalists in an informal briefing on Thursday, Governor State Bank of Pakistan Jameel Ahmad disclosed that Pakistan had already discharged $2.2 billion in external obligations during July alone, comprising $1.4 billion toward Chinese commercial loans and a further $800 million against other external liabilities.

Of the FY27 total, the governor said, approximately $3.5 billion pertains to interest payments, with the overall figure representing a marked retreat from the $ 26.5 billion serviced in FY26.

He attributed the softer trajectory to a confluence of factors, notably the easing of global interest rates.

Breaking down the composition of the FY27 bill, Jameel Ahmad said around $12 billion relates to external deposits that are anticipated to be rolled over, while a further $3 billion in commercial loans is expected to be refinanced. "As a result, the actual external repayment requirement is around $7 billion, meaning repayment pressure from August 2026 through June 2027 will remain relatively low," he said.

He cited Saudi Arabia's decision to extend its deposit rollover with Pakistan until 2028 as an example of this cushioning support.

On the central bank's current deposit book, Ahmad said SBP holds $12 billion in external deposits, $8 billion sourced from Saudi Arabia and $4 billion from China, with maturities due in December 2026 and March 2027, respectively. The government, he noted, is banking on friendly nations extending these maturities further.

Regarding the $1.4 billion Chinese commercial loan repaid in full during July, Jameel Ahmad clarified that refinancing has yet to materialise, though he expressed optimism that "Chinese banks would refinance the loan within the next few weeks." Separately, he noted Pakistan continues to carry a $250 million obligation to Kuwait, rolled over consecutively since the 1990s.

Reserves buffer strengthened through sustained interbank purchases

Turning to foreign exchange reserves, the governor said SBP has amassed a cumulative $28 billion from the interbank market over the past three years, including approximately $9 billion during FY26 alone, as part of a deliberate strategy to fortify the country's external buffers against prospective economic shocks.

These purchases, he said, have meaningfully bolstered the reserves position. As of mid-July 2026, Pakistan's total foreign exchange reserves stood at $22.6 billion, split between $17.2 billion held by SBP and $5.4 billion held by commercial banks.

SBP's own reserves had touched $18.4 billion at the start of July before retreating due to Chinese commercial loan repayments and other external outflows.

Quizzed on media reports suggesting Pakistan had approached the United States for a $10 billion balance-of-payments support package, Jameel Ahmad declined to comment. He was similarly circumspect when asked whether external debt repayments could climb higher in FY28 under the ongoing IMF programme, saying the matter would be evaluated "at the appropriate time."

The governor reiterated the central bank's confidence in meeting all external obligations through the current fiscal year, adding that SBP would continue accumulating reserves to reinforce resilience against external shocks, including potential volatility in global oil prices.

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