By Staff Reporter
ISLAMABAD: Pakistan repaid $1.43 billion in external debt on Tuesday, including a $1.3 billion Eurobond maturing the following day, in a move the government described as routine and on schedule.
The payments show the country’s efforts to maintain credibility with global investors even as it prepares to return $3.5 billion to the United Arab Emirates later this month, a step that will further test its foreign-exchange buffers. “As part of its routine course of external debt management, Pakistan has repaid its $1.3bn Eurobond maturing on April 8 — on schedule and in full,” Khurram Schehzad, adviser to the finance minister, said in a post on X. Alongside that, the country met $126.125 million in coupon obligations on other Eurobond issuances, bringing total payments on Tuesday to more than $1.426 billion, he added.
“Debt servicing continues to be executed as a non-event — reflecting consistency, discipline, and strengthened capacity,” Schehzad wrote. “The seamless execution of large external repayments underscores both capacity and consistency — reinforcing Pakistan’s credibility across global investors and financial institutions.”
The repayment comes at a delicate moment for Pakistan’s external accounts. Abu Dhabi had sought the immediate return of the $3.5 billion, which was extended in 2019 as balance-of-payments support. The funds are due back before the end of April, adding to pressure on reserves just as the country faces another $1.3 billion Eurobond repayment by June.
Foreign-exchange reserves held by the State Bank of Pakistan stood at $16.38 billion in the week ended March 27, according to the latest available data. Net foreign reserves at commercial banks totaled $5.41 billion, lifting the country’s overall reserves to $21.79 billion.
Pakistan has long depended on external borrowing to finance persistent fiscal and current-account gaps caused by a narrow tax base, chronic trade deficits and elevated debt-servicing costs. Successive governments have turned repeatedly to the International Monetary Fund, World Bank and Asian Development Bank for budgetary support and reserve-building funds.
As of February, the country’s total external debt and liabilities stood at $138 billion. That figure encompasses public and publicly guaranteed debt, obligations of public-sector enterprises, bank borrowings, private-sector external debt and intercompany liabilities to direct investors. The government is operating under a $7 billion IMF program and has set a target of lifting reserves above $18 billion by June.
Schehzad attributed Tuesday’s smooth debt servicing to “stable external buffers and improved liquidity, continued macroeconomic stabilisation and resilience, strengthening investor confidence, and a more sustainable and disciplined debt trajectory.” The timely Eurobond repayment marks the latest in a series of steps aimed at projecting fiscal discipline after years of repeated balance-of-payments strains. While the immediate cash outflow will trim reserves further when combined with the UAE repayment, officials are betting that demonstrated reliability will help sustain market access and keep the IMF program on track.
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