Timely $500m Eurobond Repayment by Pakistan
In a significant boost to Pakistan’s economic image and fiscal credibility, the Ministry of Finance announced that a timely $500m Eurobond Repayment by Pakistan was made on September 30, 2025, as scheduled. The bond, originally issued in 2015 with a 10-year maturity, was paid in full, reaffirming the country’s commitment to honoring its international financial obligations.
The announcement was made by Khurram Shahzad, Advisor to the Finance Minister, through a statement on the social media platform X. He said, “Pakistan has successfully repaid its $500 million international bond (Eurobond) as scheduled, in full compliance with all its obligations.” He further highlighted that timely debt disbursement remains business as usual, reflecting Pakistan’s dedication to fiscal discipline and debt management.
A Sign of Growing Economic Stability
The repayment comes at a time when Pakistan’s economic indicators are gradually improving. Shahzad noted that external buffers and liquidity have strengthened, and sovereign credit ratings have improved. As a result, Pakistan’s bonds are trading at a premium, something not seen in recent years.
These improvements have boosted investor confidence, signaling a positive outlook for the country’s financial future.
Debt Indicators Show Positive Trends
Pakistan’s debt profile has also shown notable improvement:
- The debt-to-GDP ratio has reduced from 77% in FY2020 to 70% in FY2025.
- The share of external debt in total public debt has dropped from 38% to 32%, which helps lower the risk associated with foreign exchange fluctuations.
- Most importantly, the pace of debt accumulation has slowed down significantly in FY2025 compared to previous years.
These changes point to a more sustainable and well-managed public debt portfolio, reducing long-term vulnerabilities.
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Strengthened Foreign Reserves
Pakistan’s foreign exchange reserves have also improved. According to the latest figures, the State Bank of Pakistan’s reserves increased by $22 million, reaching $14.38 billion as of September 19, 2025. This buildup of reserves adds a safety buffer against external shocks and provides further assurance to investors and lenders.
Future Outlook: Access to Global Markets
Despite high global borrowing costs, Pakistan is now in a better position to access international markets on more favorable terms. Shahzad emphasized that Pakistan is building a more resilient and sustainable debt profile, which will support its long-term economic growth strategy.
He described the repayment as a “solid step”, highlighting that it comes at a time when fundamentals are stronger, investor sentiment is improving, and the country is poised for a more stable financial future.
Engagement with the IMF Continues
Pakistan’s economic direction remains closely tied to its ongoing engagement with the International Monetary Fund (IMF). The government is currently undergoing:
- The second review of the $7 billion Extended Fund Facility (EFF), and
- The first review of the Resilience and Sustainability Facility (RSF).
These reviews are critical in unlocking future funding, maintaining reform momentum, and supporting Pakistan’s broader macroeconomic objectives.
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