Pakistan Retires Record Rs4.72 Trillion Domestic Debt Early
55 minutes ago
At a glance
- Pakistan has repaid over Rs4.7 trillion of public debt ahead of its maturity through a series of buyback operations.
- This marks the country's largest-ever proactive liability management exercise, aimed at improving fiscal health and reducing risks.
- According to Finance Minister’s advisor Khurram Schehzad, the latest buyback of Pakistan Investment Bonds (PIBs) worth Rs279 billion, approximately $1 billion, has…
Story so far: Pakistan has repaid over Rs4.7 trillion of public debt ahead of its maturity through a series of buyback operations. This marks the country's largest-ever proactive liability management exercise, aimed at improving fiscal health and reducing risks.
Latest development: Pakistan has successfully retired over Rs2.9 trillion in domestic debt before maturity during the last fiscal year (FY26), bringing the cumulative value of early debt retirement through buyback operations to over Rs4.72…
Pakistan has repaid over Rs4.7 trillion of public debt ahead of its maturity through a series of buyback operations. This marks the country’s largest-ever proactive liability management exercise, aimed at improving fiscal health and reducing risks.
According to Finance Minister’s advisor Khurram Schehzad, the latest buyback of Pakistan Investment Bonds (PIBs) worth Rs279 billion, approximately $1 billion, has raised the total early debt retirement to Rs4.722 trillion. Schehzad described this as the “largest and most sustained liability management operation in Pakistan’s history.”
During the fiscal year 2026, Pakistan retired Rs2.9 trillion of debt ahead of schedule, a 62% increase from Rs1.8 trillion in fiscal year 2025. Of the total retired in FY26, 51% comprised central bank debt, with the remaining 49% being market debt.
This initiative is part of an active liability management strategy designed to reduce refinancing and rollover risks, lower debt servicing costs, optimize liquidity and cash flow management, and strengthen investor confidence and fiscal resilience.
The government’s debt profile has also shown improvement, with the average debt maturity increasing from 2.7 years in FY24 to over 3.8 years in FY26. Additionally, Pakistan’s debt-to-GDP ratio has declined from 75% in FY23 to approximately 68.5% in FY26, and reliance on central bank financing has been significantly reduced.
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Pakistan has successfully retired over Rs2.9 trillion in domestic debt before maturity during the last fiscal year (FY26), bringing the cumulative value of early debt retirement through buyback operations to over Rs4.72 trillion, or approximately USD17 billion, since October 2024. This was revealed by Khurram Schehzad, Adviser to the finance minister, on his X platform.
Schehzad termed this the largest and most sustained liability management exercise in the country’s history. The latest operation in May 2026 involved the buyback of Pakistan Investment Bonds (PIBs) worth Rs279 billion, approximately USD1 billion.
Official data indicates that debt buybacks were conducted in multiple phases, including Rs826 billion in October 2024, Rs200 billion in November 2024, Rs273 billion in March 2025, Rs500 billion in June 2025, Rs1.133 trillion in August 2025, Rs122 billion in November 2025, Rs494 billion in December 2025, Rs300 billion in January 2026, and Rs595 billion in April 2026, in addition to the May 2026 operation.
The pace of early debt retirement significantly accelerated during FY26, with the government retiring Rs2.9 trillion worth of debt, marking a 62 percent increase over the Rs1.8 trillion retired during FY25. Of the retired debt, 51 percent comprised liabilities owed to the State Bank of Pakistan (SBP), while the remaining 49 percent consisted of market debt.
These liability management measures have also strengthened Pakistan’s debt profile, with the average maturity of public debt improving from 2.7 years in FY24 to over 3.8 years in FY26.
Sources: Business Recorder
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