SBP Reserves Fall by $276 Million Due to Debt Repayments
Pakistan’s foreign exchange reserves with the State Bank of Pakistan (SBP) have decreased by $276 million, dropping to $11.448 billion for the week ending January 17, 2025. This decline is mainly attributed to external debt repayments.
Finance Minister Mohammad Aurangzeb, speaking at the World Economic Forum in Davos, confirmed that Pakistan has agreed to a $1 billion loan with two Middle Eastern banks at an interest rate of 6-7%. This loan is part of Pakistan’s efforts to manage its debt obligations, although the country continues to struggle with debt servicing.
Despite agreements to roll over loans from Saudi Arabia and the UAE, Pakistan’s economic team is facing difficulties securing a debt rollover from China. Aurangzeb noted that the loan would be a short-term solution, but borrowing at commercial rates will continue to pressure the country’s external financial position.
In addition to these challenges, the profit repatriation by multinational companies in Pakistan increased by 114%, reaching $1.215 billion during the first half of the fiscal year 2025. This is up from $568 million during the same period last year.
Overall, Pakistan’s total reserves, which include those held by commercial banks, decreased by $261 million, reaching $16.189 billion. Commercial bank reserves rose slightly by $14 million to $4.70 billion during the same week.
