- FY27 debt servicing requirement declines.
- SBP interbank purchases reach $28bn.
- Foreign reserves stand at $22.6bn.
ISLAMABAD: Saudi Arabia has rolled over $5 billion in deposits for three years, top officials confirmed on Wednesday.
Finance Minister Muhammad Aurangzeb confirmed the development, while, according to The News, State Bank of Pakistan (SBP) Governor Jameel Ahmed also disclosed the same while speaking to reporters outside Parliament House.
The rollover will help Pakistan reduce pressure on its external account as it manages foreign debt repayments in the current fiscal year, Ahmed said after attending the Senate Standing Committee on Finance.
The SBP governor said Pakistan’s foreign debt servicing had declined from $26.5 billion in fiscal year 2024-25 to $21.5 billion in the current fiscal year 2026-27, owing to various factors, including declining interest rates.
Of the $21.5 billion in foreign debt servicing, around $3.5 billion will be interest repayments during the current fiscal year, he said.
The SBP governor said approximately $12 billion of the total debt servicing consisted of deposits held with the central bank, while $3 billion were commercial loans expected to be refinanced. The remaining foreign debt obligations hover around $7 billion.
Of the total $12 billion in deposits, $8 billion are from Saudi Arabia. Pakistan will require rollovers of deposits falling due in December 2026 and March 2027, according to the SBP governor.
In the first month of the fiscal year, July 2026, Pakistan undertook foreign debt servicing of $2.2 billion, he said, adding that pressure on repayments would be lower during the remaining months from August 2026 to June 2027.
According to the SBP governor, the central bank’s total purchases from the interbank market stood at $28 billion over the last three years. The SBP purchased around $9 billion in the last financial year to build a buffer against exogenous economic shocks.
The country’s foreign exchange reserves stood at $22.6 billion on July 17, 2026, comprising $17.2 billion held by the SBP and $5.4 billion held by commercial banks.
Reserves held by the SBP had climbed to $18.4 billion by July 3, 2026, but heavy debt repayments and other external obligations led to a decrease in the central bank’s foreign reserves.
On the question of increased debt servicing requirements projected by the International Monetary Fund for the next fiscal year, 2027-28, he said this would be analysed later.
As far as the current fiscal year is concerned, Pakistan is comfortable with its foreign debt servicing repayments. It appears the central bank will continue to focus on building foreign exchange reserves to absorb potential shocks, particularly in the event of a spike in international fuel prices.
