Pakistan repaid a $500 million Eurobond on schedule on Tuesday, September 30, 2025, as part of its 2015 issuance maturing that day. The State Bank of Pakistan handled the transaction using foreign reserves. This event underscores improved economic management. Officials link it to reforms under the IMF programme. The repayment occurred in Islamabad.
Significance for South Asia’s Economy
This Pakistan Eurobond repayment holds weight in South Asia. It eases regional debt concerns. Neighbours watch closely as Pakistan stabilises. The move reinforces trust in emerging markets. South Asia faces shared fiscal pressures from global rates. Pakistan’s success offers a model for timely Eurobond maturity. It highlights IMF ties as a buffer against volatility. Regional growth depends on such stability.
Details of the Repayment
Pakistan issued the Eurobond in 2015 with a 10-year tenor. The $500 million principal plus interest fell due on September 30, 2025. The government met the obligation without delay. This marks the latest in a series of on-time debt services.
Khurram Schehzad, Adviser to the Finance Minister, stated: “Timely debt servicing remains business as usual, reflecting the country’s commitment to financial discipline.” He added: “This is a steady step forward, repayment as expected, but with stronger fundamentals, improved investor sentiment, and a more resilient outlook.”
The State Bank of Pakistan drew from reserves now at $10.2 billion as of September 26, 2025. This covers three months of imports. The repayment did not strain liquidity.
Economic Indicators Post-Repayment
Key metrics show progress. The debt-to-GDP ratio dropped to 70% in FY25 from 77% in FY20. External debt’s share in total public debt fell to 32% from 38% over the same period. This cuts foreign exchange risks.
Debt growth slowed in FY25. Officials credit IMF-guided reforms. Inflation hit 0.3% in April 2025, a record low. The central bank cut rates by 1,100 basis points since June 2025. Global agencies upgraded ratings. Fitch, Moody’s and S&P Global lifted Pakistan’s sovereign score this year. Bonds now trade at a premium.
IMF Ties Bolster Timely Eurobond Maturity
Pakistan’s IMF relations played a key role. The Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) support reforms. The IMF completed its first EFF review in May 2025. It disbursed $1 billion then, raising totals to $2.1 billion.
An IMF mission visited in September 2025 for the next review. Finance Minister Muhammad Aurangzeb noted positive talks in April 2025. He said Pakistan repaid the Eurobond on time during a Citibank meeting.
The IMF programme demands fiscal surplus. Pakistan achieved 2.0% of GDP in H1 FY25, on track for 2.1% by year-end. This aids Pakistan timely Eurobond maturity. Assistance from allies helped too. China, UAE and Saudi Arabia provided rollovers. These bridged gaps before IMF inflows.
Historical Context
Pakistan faced crisis in 2023. Reserves dipped low. Balance-of-payments issues loomed. Default risked. The IMF Stand-By Arrangement averted it with $3 billion. A final $1.1 billion tranche came in 2024. Post-2023, Pakistan repaid $1 billion in April 2024 Eurobonds early. Reserves then stood at $8 billion after IMF aid.
The 2015 Eurobond was part of diversification. Earlier, a 2004 bond repaid in 2009. Green Eurobonds launched in 2021 raised $500 million for dams. These steps built credibility. Yet challenges persist. Floods in 2022 strained budgets. Climate risks demand RSF funds.
Challenges Overcome
Reforms cut deficits. Tax collection rose 25% in FY25. Energy subsidies trimmed. State enterprises restructured. External debt totals $86.4 billion as of September 2023. Servicing hit $2.4 billion in Q1 FY24. Principal was $1.6 billion.
The latest repayment reduces outstanding international bonds to $6.3 billion. This is 6% of public external debt. Investor interest grows. Stock markets climbed. Foreign inflows returned.
What’s Next
Pakistan eyes market access. Easing global costs aid competitive borrowing. A new sukuk or Eurobond may raise $500 million to $1 billion soon. IMF reviews continue. The next tranche could add $1 billion. This supports reserves. Officials plan climate integration. The 2021 green bond success shows potential.
The Pakistan Eurobond repayment sets a positive tone. Future maturities loom in 2026. Stronger IMF ties ensure readiness. The forward path focuses on growth. Sustainable debt profiles emerge. Pakistan timely Eurobond maturity inspires confidence.
Published in SouthAsianDesk, October 1st, 2025
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