Pakistan's early debt repayments cross Rs4.7tr under active debt management strategy

Pakistan has crossed Rs4.7 trillion in early public debt repayments after completing another buyback of Pakistan Investment Bonds (PIBs) worth Rs279 billion, as the government accelerates efforts to reshape its debt profile and reduce financing risks.

According to Advisor to the Finance Minister Khurram Schehzad, the latest transaction increased the cumulative value of debt retired before maturity to Rs4.722 trillion, making it the country's largest and longest-running liability management programme.

The buyback initiative forms part of a broader debt management strategy designed to replace conventional borrowing practices with proactive balance-sheet management. The government says the approach is intended to reduce rollover and refinancing risks, lower debt servicing costs, improve liquidity management, and strengthen long-term fiscal resilience.

Data shared by the finance ministry showed that Rs2.9 trillion of debt was retired ahead of schedule during FY26, compared with Rs1.8 trillion in FY25, reflecting a 62% increase year-on-year. Around 51% of the FY26 repayments consisted of central bank debt, while the remaining 49% comprised market debt.

Officials also highlighted improvements in Pakistan's debt indicators. The average maturity of government debt has increased from 2.7 years in FY24 to more than 3.8 years in FY26, while the debt-to-GDP ratio has declined from 75% in FY23 to around 68.5% in FY26. The government also reported a significant reduction in its dependence on central bank financing.

The liability management exercise has been carried out through multiple buyback operations since October 2024, with subsequent transactions conducted in November 2024, March 2025, June 2025, August 2025, November 2025, December 2025, January 2026, April 2026, and May 2026, when the latest Rs279 billion operation was completed.

Schehzad said the strategy complements wider economic reforms aimed at improving public finances, strengthening fiscal and external balances, containing inflation, and supporting macroeconomic stability through a more sustainable debt management framework.