Business Recorder
KARACHI/ISLAMABAD: Pakistan on Tuesday successfully met over USD 1.43 billion in external debt obligations, with officials terming the development a non-event that underscores improving economic fundamentals and strengthened debt management capacity. In a post shared on X, adviser to the finance minister on economic affairs Khurram Schehzad said Pakistan repaid its USD 1.3 billion Eurobond maturing on April 8, 2026, on schedule and in full, alongside USD 126.125 million in coupon payments on other Eurobond issuances. This brought the total payments for the day to more than USD 1.426 billion, marking one of the larger single-day external debt servicing outflows in recent months. These 5-year Eurobonds were issued in April 2021 and was matured on April 8, 2026. Schehzad noted that the smooth and timely execution of these repayments demonstrates that Pakistan’s external debt servicing is being managed in a routine and predictable manner, without creating market disruptions or uncertainty. Terming it a “non-event by design,” he said such outcomes are the result of consistent policy discipline and improved financial planning. “This performance is underpinned by stable external buffers and improve liquidity, continued macroeconomic stabilization and resilience, strengthening investor’s confidence and a more sustainable and disciplined debt trajectory”, he said. According to the adviser, the country’s ability to meet its external obligations is underpinned by relatively stable external buffers and improved liquidity conditions. In addition, ongoing macroeconomic stabilisation efforts have started to yield results, strengthening the overall resilience of the economy and enabling authorities to handle large external debt repayments without undue pressure on foreign exchange reserves. Schehzad further highlighted that investor confidence has shown signs of recovery, supported by policy continuity and a more structured approach to economic management. He said that maintaining a sustainable and disciplined debt trajectory remains a key priority for the government. A major component of these payments includes the successful repayment of a USD 1.3 billion Eurobond on April 8, while around USD 3.5 billion is due to be returned to the United Arab Emirates (UAE) in matured deposits during this month. The UAE repayments are scheduled in tranches, with about USD 450 million due on April 11, USD 2 billion on April 17, and USD 1 billion on April 23. The heavy repayment burden comes at a time when the country is making efforts to stabilize its external account. However, Government of Pakistan is confident that will meet all external debt obligation from the available resources. Foreign exchange reserves held by the SBP stood at USD 16.3 billion in the first week of April 2026. In February, SBP Governor Jameel Ahmed had projected that reserves would rise above USD 18 billion by June and reach an all-time high of USD 20.2 billion by December 2026. However, the unplanned repayments to the UAE are now likely to disrupt these targets. According to Topline Securities, surprisingly, with the massive external payments in April, the FX market has remained calm after this development, and PKR has marginally appreciated against the expectation of depreciation. Similarly, there was no panic observed in the exchange companies, as per our contacts and there is no news of huge premium in informal market. In dollar bond market also, there was no panic seen yesterday though many markets were closed due to Easter, it added. According to Topline Analysts, besides borrowing from friendly countries, Government may opt for arrangement through SWAPs till Jun 2026. The currency SWAPS exposure of Pakistan currently stands at USD 1.8 billion vs. maximum of USD 5.7 billion in Feb-23. This increase may cover up for reserves fall in short term however this will affect the IMF quarter end Net International Reserves (NIR) target. Secondly, the SBP to intervene in FX market to buy dollars. “Another option which could be considered is to aggressively buy few of the requirement from market and take a small hit on reserves for the balance amount,” analysts said. Copyright Business Recorder, 2026
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