The State Bank of Pakistan (SBP) bought $7.7 billion from the currency market during the fiscal year ending in June 2025 to strengthen foreign exchange reserves and facilitate foreign debt repayments.
According to a brokerage report, the central bank acquired $502 million in foreign currency in June, contributing to the total purchases of $7.7 billion for FY25. This intervention helped increase the country’s forex reserves from $9.4 billion in June 2024 to $14.5 billion, alongside the repayment of external debt.
The SBP’s foreign currency purchases come as Pakistan successfully repaid a $500 million Eurobond, which matured on September 30.
Advisor to Finance Minister Khurram Schehzad highlighted that the bond repayment, coupled with improved investor confidence and stronger reserves, marks a positive development for Pakistan’s financial standing.
The bond, issued in 2015 with a 10-year tenor, was repaid on schedule. Schehzad noted that Pakistan’s sovereign ratings have improved, and the country’s bonds are now trading at a premium. Additionally, the debt-to-GDP ratio has decreased from 77% in FY20 to 70% in FY25.
Pakistan’s external debt servicing for FY26 is projected at $26 billion, with $16 billion expected to be rolled over or refinanced. The net repayment amount is estimated to be between $10 and $11 billion, according to the central bank governor’s briefing after the monetary policy meeting on September 15.
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