SBP Reserves Expected to Gain $2.5 Billion Next Week

Forex reserves held by the State Bank of Pakistan are expected to rise by $2.5 billion next week after securing $2 billion from Saudi Arabia a day earlier and raising an additional $500 million through a Eurobond issuance in international markets.

According to Advisor to the Finance Minister, Khurram Schehzad, the government has successfully returned to global capital markets after a four-year gap by issuing a three-year Eurobond worth $500 million under its Global Medium-Term Note program.

The Eurobond attracted strong investor participation despite global financial uncertainty, marking Pakistan’s first commercial borrowing from international investors in 4 years.

The combined inflows from Saudi financial support and the Eurobond sale are expected to significantly strengthen the country’s external buffers, easing pressure on the rupee and improving near-term financing stability.

The Eurobond transaction restores Pakistan’s access to international debt markets and reopens an important funding channel after years of limited external financing options caused by economic instability and elevated borrowing costs.

Khurram Schehzad tweeted that the proceeds will add liquidity to Pakistan’s sovereign yield curve and help establish pricing benchmarks for future international borrowing. The government is also working on additional external financing plans, including potential international Sukuk issuance and progress toward launching a Panda Bond program.

Pakistan had remained largely absent from global bond markets since the balance-of-payments crisis restricted access to commercial borrowing.

Meanwhile, the Finance Division is also preparing to launch its first Chinese Panda bond this year to raise yuan-denominated debt to diversify funding, alongside expanding currency swap agreements with China, Iran, Russia, and the European Union to reduce dollar dependence, boost trade settlement flexibility and strengthen foreign exchange.