Pakistan has repaid a $1.4 billion Chinese commercial loan, with the government expecting the refinancing of the facility to be completed within the next few weeks, State Bank of Pakistan (SBP) Governor Jameel Ahmad said.

Speaking after a meeting of the Senate Standing Committee on Finance, the SBP governor said Pakistan paid back $2.2 billion in external debt obligations during July, including the Chinese commercial loan and another $800 million in other foreign debt repayments.

Ahmad said technical formalities for refinancing the Chinese loan are currently in progress, and the funds are expected to be received soon.

He added that the State Bank has purchased around $28 billion from the domestic foreign exchange market over the past three years as part of efforts to strengthen foreign exchange reserves and improve external sector stability.

The SBP governor further stated that Pakistan’s gross external financing requirement has declined to $21.5 billion for the current fiscal year, compared with $26.5 billion previously.

Out of the total requirement, approximately $3.5 billion is linked to interest payments on external debt, he said.

Ahmad also highlighted that Pakistan will need the rollover of around $12 billion in deposits from Saudi Arabia and China to maintain comfortable foreign exchange reserves during the fiscal year.

Analysts said the repayment of commercial debt demonstrates Pakistan’s commitment to meeting external obligations, while timely refinancing from China could provide relief to the country’s balance of payments position.