ISLAMABAD: Pakistan has repaid a $1.4 billion Chinese commercial loan, while refinancing from Chinese banks is expected to arrive in the coming weeks, according to State Bank of Pakistan (SBP) Governor Jameel Ahmed.
Speaking to reporters outside Parliament House after a meeting of the Senate Standing Committee on Finance, Ahmed said Pakistan completed $2.2 billion in foreign debt servicing during July 2026, including the repayment of the Chinese commercial loan and $800 million towards other external obligations.
Chinese refinancing expected soon
The SBP governor said Chinese banks have not yet refinanced the repaid loan, but the process is expected to be completed within a few weeks.
The repayment contributed to a decline in the central bank’s foreign exchange reserves, which had risen to $18.4 billion by July 3, 2026, before falling due to heavy external debt repayments.
As of July 17, 2026, Pakistan’s total foreign exchange reserves stood at $22.6 billion, including $17.2 billion held by the SBP and $5.4 billion maintained by commercial banks.
External debt servicing eases
Ahmed said Pakistan’s total foreign debt servicing requirement has declined from $26.5 billion in fiscal year 2024-25 to $21.5 billion in FY2026-27, mainly due to lower global interest rates and other financial factors.
He added that:
- Around $3.5 billion of this year’s repayments will be interest payments.
- Approximately $12 billion consists of foreign deposits held with the SBP.
- About $3 billion comprises commercial loans expected to be refinanced.
- The remaining $7 billion relates to other foreign debt obligations.
Of the $12 billion in foreign deposits, $4 billion belongs to China and $8 billion to Saudi Arabia. Pakistan will require rollovers of deposits maturing in December 2026 and March 2027.
Saudi Arabia rolls over $5bn deposits with Pakistan for three years
Saudi rollover eases pressure
The SBP governor noted that Saudi Arabia has already rolled over $5 billion in deposits for three years, helping ease pressure on Pakistan’s external account and supporting foreign exchange stability.
He also revealed that Kuwait’s outstanding $250 million loan dates back to the 1990s.
SBP continues reserve-building strategy
According to Ahmed, the SBP has purchased $28 billion from the interbank foreign exchange market over the past three years, including around $9 billion during the last fiscal year to strengthen reserves against external economic shocks.
When asked about reports of Pakistan seeking $10 billion in balance-of-payments support from the United States, the SBP governor declined to comment.
Regarding the IMF’s projection of higher debt servicing requirements in FY2027-28, Ahmed said the issue would be assessed later, adding that Pakistan remains comfortable with its external repayment obligations for the current fiscal year and will continue focusing on building foreign exchange reserves.
