Pakistan receives $10.1 billion in loans and rollovers in 7MFY26, UAE $2 billion rollover status unclear

Pakistan received $10.1 billion in foreign loans and debt rollovers during the July–January period of the current fiscal year, according to official data, with half of the inflows coming from fresh disbursements and the rest from extensions of existing deposits, The Express Tribune reported.

Data released by the Ministry of Economic Affairs and the State Bank of Pakistan shows that $5.1 billion was obtained in fresh loans, while about $5 billion comprised rollovers by key bilateral and multilateral partners. The total inflow is $1.4 billion lower than the same period last year.

The status of a $2 billion deposit from the United Arab Emirates remains unannounced. The facility matured in January and again this month, but the central bank has not formally confirmed its rollover. 

In contrast, Saudi Arabia extended a $3 billion deposit in December for another year through the Saudi Fund for Development, while China rolled over a $1 billion cash deposit earlier in the fiscal year. The IMF also disbursed a $1 billion tranche.

For FY2025-26, the government and the central bank have projected over $25 billion in total foreign inflows, including both new borrowing and debt rollovers. So far, inflows during the first seven months account for about 40% of the annual estimate. The country faces maturities of $12.5 billion in cash deposits during the fiscal year and remains dependent on rollovers amid foreign exchange reserves of around $16 billion, which include borrowed deposits.

Multilateral lenders released $2.1 billion between July and January. The Asian Development Bank provided $622 million, while the World Bank disbursed $828 million. The Islamic Development Bank released $502 million, including $484 million under an oil financing facility.

Foreign commercial borrowing during the period stood at $142 million, below budgeted targets. However, the government has recently accepted terms for a $600 million facility from Standard Chartered Bank at an interest rate of 6.3%, while Saudi Arabia disbursed a $705 million oil facility at 6%.

Pakistan also received $269 million for the Chashma Nuclear Power Plant (C-5) and $1.5 billion through Naya Pakistan Certificates.

Plans to raise $400 million through sovereign bonds and $250 million via Eurobonds have yet to materialise. Announcements regarding the issuance of Panda bonds have also not been implemented.

In response to criticism over reliance on external borrowing, the Ministry of Finance stated that total external debt and liabilities stand at $138 billion. It said nearly 75% of external public debt consists of concessional and long-term financing from multilateral institutions and bilateral partners, while about 7% comprises commercial loans and another 7% relates to long-term Eurobonds. The ministry added that interest payments are rising due to global rate trends.