The government has announced a target to raise Rs8.7 trillion in new domestic debt from November 2024 to January 2025, primarily through commercial banks, as part of a comprehensive debt restructuring strategy.
Of this amount, Rs6.85 trillion will be allocated to settle maturing debt obligations with financial institutions.
The State Bank of Pakistan (SBP) has issued an auction target calendar for the sale of 3-month, 6-month, and 12-month Government of Pakistan Market Treasury Bills for the period from November 2024 to January 2025.
Rs5.5 trillion of the planned debt will be raised via short-term Treasury bills (T-bills) with maturities spanning three to 12 months, covering Rs6.72 trillion set to mature within the same timeframe.
Additionally, Rs3.2 trillion will be raised through Pakistan Investment Bonds (PIBs) with longer tenures ranging from two to 10 years, despite a modest Rs129 billion in PIB obligations maturing in this period.
This debt re-profiling initiative aims to reduce the government’s reliance on high-interest, short-term borrowing by shifting toward lower-cost, longer-term bonds.
The government’s reliance on high-cost domestic debt has eased due to a boost in foreign debt inflows, following the International Monetary Fund’s (IMF) $7 billion loan program approved in September.
Liquidity support from the SBP to banks has also reduced, curbing banks’ prior capacity to lend significantly to the government. This change is visible in the declining stock of Open Market Operations (OMOs).
