Pakistan moves to retire PKR 500 billion SBP debt early

Combined early debt retirements hit PKR 1.5 trillion in FY25


Pakistan’s Ministry of Finance has announced the early retirement of PKR 500 billion in debt owed to the State Bank of Pakistan (SBP), originally scheduled to mature in 2029. This proactive move, executed by the Debt Management Office (DMO), is aimed at reducing refinancing risk, extending debt maturities, and bolstering macroeconomic stability.

This latest early payoff builds on a December 2024 milestone when the government bought back PKR 1 trillion in market debt—the first such operation in Pakistan’s history. Combined, these actions amount to PKR 1.5 trillion in early debt retirements in FY25, signalling renewed fiscal confidence.

Officials highlighted several benefits resulting from the move: Pakistan’s debt‑to‑GDP ratio has fallen from 75 percent in FY23 to approximately 69 percent in FY25; the average time to debt maturity has increased from 2.7 to 3.75 years; and refinancing risks have eased. Moreover, the government’s disciplined debt strategy has reportedly saved PKR 830 billion in interest costs in FY25.

Khurram Schehzad, Advisor to the Prime Minister on Economic and Financial Reforms, shared the update on social media platform X (formerly twitter) that the early retirement “reflects the government’s strong commitment to proactive, disciplined, and forward‑looking financial governance.” He noted the milestone as “a decisive, future‑focused economic management aimed at building a resilient, credible, and fiscally sustainable Pakistan.”

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