Pakistan has retired over Rs 2.6 trillion of domestic debt before its scheduled maturity, Advisor to the Finance Minister Khurram Schehzad announced on Sunday. The early repayments mark the first operation of this scale in the country’s fiscal history.
Schehzad shared on X that the Ministry of Finance (MoF) cleared more than Rs 1.6 trillion owed to the State Bank of Pakistan (SBP) in just 59 days. On June 30, 2025, the government retired Rs 500 billion, followed by another Rs 1,133 billion repayment on August 29, bringing the total early retirement of central bank debt to Rs 1,633 billion.
Earlier in the first half of fiscal year 2025, the MoF had also retired Rs 1.0 trillion of domestic commercial market debt, making the combined early repayments of SBP and commercial debt over Rs 2.6 trillion within a single fiscal year.
Schehzad noted that nearly 30% of SBP debt was retired well before its 2029 maturity, reducing the outstanding central bank debt from Rs 5.5 trillion to Rs 3.8 trillion. This move is expected to ease refinancing pressure, lower rollover risks, and create additional fiscal space for development spending.
He added that the average maturity of Pakistan’s domestic debt has increased to 3.8 years from 2.7 years in FY24, representing the sharpest single-year improvement on record and surpassing IMF targets.
The advisor highlighted that disciplined repayments and falling interest rates have already secured over Rs 800 billion in taxpayer savings for FY25. He described the early retirement strategy as a forward-looking measure aimed at restoring fiscal credibility, strengthening economic resilience, and promoting sustainable financial governance.
