KARACHI: Pakistan needs to repay $24.8 billion in external debt during the current fiscal year, data from the State Bank of Pakistan (SBP) released on Wednesday showed.
It is anticipated that these obligations will be managed comfortably and on time due to improved foreign fund inflows and moderate current account deficits.
The SBP has released numbers regarding international reserves and foreign currency liquidity for the fiscal year 2025, indicating that Pakistan will need $4.98 billion in July, $2 billion in August and September, and $17.8 billion from October to June, bringing the total amount to $24.8 billion to fund its external payment obligations for the entire FY25.
Out of the total $24.8 billion amount, $21.2 billion is principal repayment and $3.6 billion is interest payment.
The total amount of external repayments required for FY25 is slightly less than the $26.2 billion quoted by the SBP Governor Jameel Ahmad during a media and analyst briefing following the monetary policy meeting on Monday.
In terms of gross financing requirements, the governor stated that the total amount of $4 billion is on account of interest, and $22 billion is for principal repayment.
Out of this $22 billion, $16.3 billion is expected to be rolled over, leaving $10 billion to be repaid. Of this amount, $1.1 billion was repaid in July, resulting in net repayments of $9 billion for the first 11 months of this fiscal year.
The State Bank projects that its foreign exchange reserves will reach $13 billion by the end of FY25, up from the current $9.1 billion. The SBP also believes that the quality of these reserves is better than in previous years.
“It is important to note that the due amount in August and September 2024 seems to be only 8.0 per cent of total obligations (as per the SBP’s data) in the year,” said Topline Securities in a note.
“As a result, we believe, with the IMF approval expected in August end, FX reserves will improve in Aug/Sep 2024 from the stagnant level of $9 billion in the last four months,” it added.
