Pakistan has disbursed roughly $16 billion in interest on its foreign loans during the past four years, averaging about $4 billion each year, State Bank of Pakistan Governor Jameel Ahmed told reporters.
Speaking at his post-monetary-policy press conference on Monday, Ahmed noted that the nation's total external debt now totals about $107 billion, up from just over $100 billion in 2022.
He added that without any borrowing, the external debt figure would stand near $116 billion today because of the interest already paid.
Interest Paid Without New Loans
Approximately $10-11 billion of that interest was settled using dollars the SBP purchased from the market rather than through fresh loans.
The central bank bought more than $30 billion in foreign currency during this period, which helped raise reserves from roughly $3 billion in early 2023, enough for only two weeks of imports, to about $21.5 billion now.
Ahmed said external debt grew by just $5-6 billion over the last four years, roughly $1-1.25 billion per year, compared with an increase of about $6.5 billion annually between 2015 and 2022.
Interest Bill to Fall Below $3 Billion
The governor highlighted that the composition of Pakistan's debt has improved, with about 80 percent now coming from multilateral and bilateral lenders such as the World Bank and the Asian Development Bank, up from 55 percent in early 2023.
He expects yearly interest payments to drop below $3 billion next year.
Ahmed also said the SBP aims to boost foreign-exchange reserves to $23 billion by December and to $25 billion by June 2027.
The comments followed the SBP's decision to raise the policy rate by 50 basis points to 12 percent. Earlier this year, Pakistan's foreign-debt interest bill had been reported to surge sharply.
