The federal government is preparing to issue four Requests for Proposals (RFPs) in international markets for the launch of Panda bonds and dollar-denominated bonds, as part of a broader strategy to strengthen debt management and diversify funding sources. The plan was outlined during a briefing by the Debt Management Office (DMO) of the Ministry of Finance with financial market participants at the Pakistan Stock Exchange (PSX), according to a news report.
Officials said the government expects pricing on new issuances to remain within prevailing secondary market yields for Pakistan’s bonds, with Panda bonds likely to offer more competitive rates. They noted that 10-year Chinese bonds currently yield below 2 percent, compared with 4–4.5 percent on US bonds of similar tenor.
Alongside external borrowing, the DMO is working on exchange rate–linked notes and bonds for local investors, aimed at attracting dollar liquidity within Pakistan and meeting demand from investors holding foreign currency. To strengthen international participation, the government has begun global roadshows and finalized a list of more than 100 overseas investors, focusing on long-term “real money” investors rather than short-term hedge funds.
The DMO also briefed participants on upcoming external obligations, noting that the next Eurobond maturity of $1.3 billion falls due on April 8, 2026. Officials said the previous Eurobond repayment in September 2025 was met smoothly due to adequate liquidity.
On the domestic front, the government plans to issue more fixed-rate and longer-term instruments to reduce refinancing risks. The average time to maturity (ATM) of domestic debt improved to 4.02 years in December 2025 from 3.8 years in June 2025, with a target of 4.25 years by 2028. Net issuance will increasingly be skewed toward Pakistan Investment Bonds, including fixed-rate and zero-coupon bonds, while limiting reliance on short-term treasury bills.
The share of fixed-rate instruments has risen to 24.75 percent as of December 2025 from 18 percent in June 2024, with a target of over 30 percent by 2028. The proportion of short-term instruments has declined to 16.7 percent from 24 percent over the same period. Shariah-compliant instruments currently account for 14.25 percent of domestic debt, with plans to raise this above 20 percent by 2028.
Officials also said work was underway to address higher rates on National Savings Schemes, which have constrained retail participation in the debt market. The ministry aims to further reduce foreign exchange risk by broadening the local currency investor base, keeping the domestic-to-external debt mix around 70:30, while improving key indicators such as gross financing needs and average maturity.
