By Staff Reporter
ISLAMABAD: Pakistan has repaid a $500 million Eurobond on schedule, signalling fiscal discipline amid improving foreign reserves and a more sustainable debt profile, according to the government.
The bond, issued in 2015 with a 10-year tenor to raise funds from global investors, matured on September 30.
“Timely debt servicing remains business as usual, reflecting the country’s commitment to financial discipline,” Khurram Schehzad, adviser to the finance minister, said on the X platform.
He described the repayment as encouraging, coming at a time when external buffers and liquidity have improved, sovereign ratings have been raised, and investor confidence is rising, with Pakistan’s bonds recently trading at a premium.
Schehzad highlighted improvements in key metrics, noting that the debt-to-gross domestic product ratio had fallen from 77 percent in fiscal 2020 to 70 percent in fiscal 2025. “External debt’s share in total public debt has declined from 38pc to 32pc in FY25, reducing FX vulnerability,” he added. “Debt growth has moderated sharply in FY25 versus in earlier years.”
Looking forward, easing global borrowing costs combined with stronger fundamentals will allow Pakistan to access markets on more competitive terms and build a more sustainable debt profile, he said. “This is a steady step forward — repayment as expected, but with stronger fundamentals, improved investor sentiment, and a more resilient outlook.”
The repayment marks a milestone for Pakistan, which grappled with a prolonged economic crisis in recent years, characterised by critically low foreign exchange reserves, an acute balance-of-payments crunch, and the threat of default in 2023. That risk was averted after the International Monetary Fund released a crucial loan tranche, supplemented by support from allies including China, the United Arab Emirates, and Saudi Arabia.
Since then, Pakistan has implemented tough IMF-prescribed reforms to stabilise the economy and strengthen macroeconomic indicators. This year, global credit rating agencies such as Fitch, Moody’s, and S&P Global have upgraded Pakistan’s sovereign credit rating. Foreign exchange reserves have shown signs of stabilisation in recent weeks. Reserves held by the State Bank of Pakistan rose by $22 million week-over-week to $14.38 billion as of September 19, according to the latest data.
The government is currently in discussions with the IMF for the second review of its $7 billion Extended Fund Facility program and the first review of the Resilience and Sustainability Facility.
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