Pakistan has returned to the long-term international bond market with its largest-ever single issuance, raising $3 billion at respectable pricing despite difficult global conditions. As argued in this space a few weeks ago, the reopening of the market creates an opportunity that should be used while it lasts.

The objective should not simply be to borrow more. It should be to change the composition and maturity profile of Pakistan’s external liabilities by replacing shorter-tenor obligations with longer-term market debt, reducing dependence on politically sensitive bilateral rollovers and creating space to build SBP reserves.

The timing matters because the latest issuance appears closely connected to another episode in Pakistan’s increasingly complicated external liability management. The government is expected to repay the $3 billion received from Saudi Arabia earlier this year, funding that had itself arrived after Pakistan repaid roughly $3.5 billion to the UAE.

There has been some suggestion from within official circles that the Saudi facility may yet be rolled over or otherwise restructured. Even so, the IMF’s current projections for gross official reserves of around $21 billion by June 2027 suggest that significant repayments are already embedded in the external financing framework.

Pakistan should aim higher. A reserve target closer to $25 billion would move the country towards roughly four months of goods import cover and provide a more meaningful cushion against both external shocks and creditor concentration risk.

The more important objective, however, is the maturity structure sitting behind those reserves. Pakistan’s recurring external vulnerability has never simply been about the total quantum of debt; it has also been about how much must be refinanced within short periods and how dependent that refinancing is on a handful of friendly foreign partners.

Multilateral........

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