Pakistan is preparing to make a significant external debt repayment of about $1.3 billion in April 2026, covering both principal and interest on an international Eurobond that is maturing, officials said, in a move that underscores ongoing pressure on the country’s external finances ahead of crucial International Monetary Fund (IMF) negotiations.
The debt service obligation comes as the government continues efforts to strengthen its Net International Reserves (NIR) position and satisfy the conditions of Pakistan’s $7 billion IMF Extended Fund Facility (EFF) programme. An IMF review mission is due to arrive later this month and will hold talks in Karachi and Islamabad from early March, focusing on fiscal reforms, external financing, and progress on structural benchmarks agreed under the programme.
To bolster external buffers ahead of the payment and IMF assessment, the Ministry of Finance plans to issue Panda bonds in China once the local holiday period ends, aiming to raise an initial $250 million tranche amid signs of strong investor interest and potential oversubscription. Officials also pointed to the early repayment of a $700 million Chinese commercial loan as a deliberate step to demonstrate Pakistan’s repayment capacity; Chinese banks have indicated they will refinance the facility within the current fiscal year.
In parallel, Islamabad is in discussions with international commercial banks to secure an additional $500 million in fresh financing during the ongoing fiscal cycle, as authorities seek to stabilise external accounts and maintain momentum under IMF‑backed reforms aimed at strengthening economic fundamentals.
Analysts say that managing maturing international bonds and preserving foreign exchange reserves remain key tests for Pakistan’s economic strategy, particularly as it negotiates with the IMF on unlocking further support and sustaining external viability in a challenging global financing environment.