ISLAMABAD – Pakistan has repaid $3.907 billion in external debt andinterest payments in the second quarter of the ongoing fiscal year. Thisdigit has experienced a 27% increase in the past three months.
According to the State Bank of Pakistan’s (SBP) data, the external debtservicing increased by $829 million from $3.078 billion in theJuly-September period of the fiscal year 2019-20.
During the period under review, principal and interest payments on foreignloans went up.
Payments on principal totalled up to $3.058 billion, compared to $2.277billion. Meanwhile, the interest payments stood at $89 million from $801million.
The growing foreign debt will also lead to an increase in interest paymentson euro/Sukuk bonds, multilateral and commercial loans.
To stabilize the country’s balance of payment position, the government hadto make use of external sources, simultaneously limiting the currentaccount deficit by 75% in the first half.
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The foreign exchange reserves held by the SBP increased to $12.430 billionas of February 7th.
This, however, is piling up foreign debt burden on the country’s economy.In the second quarter of FY2020, external debt rose to $111 billion from$106 billion during the end of June last year.
Between August 18th, 2018 and June 30th, 2019 $.39 billion on account offoreign debt was repaid under the current government. In the first sixmonths of the current fiscal year, the government paid $6.985 billion inexternal debt servicing.
