Pakistan has paid around $16 billion in interest on its foreign loans over the past four years, averaging approximately $4 billion annually, State Bank of Pakistan (SBP) Governor Jameel Ahmed has said.
Speaking at a post-monetary policy press conference, the governor said Pakistan’s total external debt currently stands at around $107 billion, compared with more than $100 billion in 2022.
He explained that Pakistan’s external debt increased by only $5 billion to $6 billion over the past four years, equivalent to around $1 billion to $1.25 billion annually. In comparison, external debt grew by approximately $6.5 billion annually between 2015 and 2022.
According to the governor, around $10 billion to $11 billion in interest payments were financed through dollars purchased by the central bank from the market rather than fresh borrowing. The SBP purchased more than $30 billion from the market during this period.
These purchases also helped increase Pakistan’s foreign exchange reserves from around $3 billion in early 2023 to approximately $21.5 billion.
The governor said the structure of external debt had improved, with around 80 percent now coming from multilateral and bilateral lenders, including the World Bank and Asian Development Bank. This share stood at around 55 percent in early 2023.
He expects Pakistan’s annual foreign loan interest payments to fall below $3 billion next year.
The SBP also aims to increase foreign exchange reserves to $23 billion by December 2026 and $25 billion by June 2027.
The remarks came after the central bank raised its policy rate by 50 basis points to 12 percent.
