Foreign exchange reserves held by the State Bank of Pakistan are expected to increase by around $2.5 billion next week following fresh external inflows, including $2 billion from Saudi Arabia and an additional $500 million raised through a Eurobond issuance in international markets.
According to Advisor to the Finance Minister Khurram Schehzad, Pakistan has successfully returned to global capital markets after a four-year gap by issuing a three-year $500 million Eurobond under its Global Medium-Term Note program.
The bond reportedly attracted strong investor demand despite ongoing global financial uncertainty, marking Pakistan’s first commercial borrowing from international investors in four years.
Officials say the combined inflows from Saudi financial support and the Eurobond issuance are expected to strengthen the country’s external buffers, ease pressure on the rupee, and improve short-term financing stability.
The Eurobond also signals Pakistan’s renewed access to international debt markets, reopening a key funding channel that had remained closed due to economic instability and high borrowing costs in recent years.
Khurram Schehzad noted that the proceeds will help add liquidity to Pakistan’s sovereign yield curve and provide pricing benchmarks for future international borrowing. He added that the government is also exploring additional external financing options, including a potential international Sukuk issuance and progress on a Panda Bond program.
Pakistan has largely stayed away from global bond markets since a balance-of-payments crisis limited its access to commercial financing.
In parallel, the Finance Division is preparing to launch its first Chinese Panda bond this year to raise yuan-denominated debt, while also expanding currency swap arrangements with partners including China, Iran, Russia, and the European Union. These steps aim to reduce reliance on the US dollar, enhance trade settlement flexibility, and strengthen foreign exchange stability.
