Pakistan Takes New Record Loan to Repay Outstanding Loans

ISLAMABAD: Pakistan has raised $3 billion from international investors through bonds to help repay a short-term loan from Saudi Arabia.

The government borrowed $3 billion in two parts:

• $1.75 billion for 5.5 years at 7.5% interest
• $1.25 billion for 10 years at 7.9% interest

This is Pakistan’s biggest single international bond sale. Investors ordered nearly $6 billion worth, showing strong demand. Finance Minister Muhammad Aurangzeb called it a positive sign of renewed confidence in Pakistan’s economy. He said it is part of a planned strategy to replace expensive short-term loans with longer-term ones and reduce the risk of having to repay large amounts at once.

The money will help repay a $3 billion loan from Saudi Arabia that is due next month (originally taken to repay the UAE). Interest rates are higher than in 2021 mainly because global interest rates (especially US Treasury rates) have risen a lot since then. Officials note that the new bonds still offer relatively competitive pricing given today’s market conditions.

The proceeds will support overall external financing needs and may also be used to replace other short-term debts. .. CN report, 07 Sep 2026