Pakistan has made its largest-ever early repayment of domestic debt, retiring Rs1.2 trillion owed to the State Bank of Pakistan well ahead of schedule, Khurram Schehzad, the finance minister's adviser, said on Saturday.
"This is the single largest early-repayment tranche undertaken so far, surpassing the previous high of Rs1,133 billion - and takes cumulative domestic debt retired ahead of maturity to over Rs5.92 trillion," said Schehzad in a post on the social media platform X.
The adviser said the government's early debt retirement has gained momentum, with Rs1.8 trillion repaid ahead of scheduled maturity in fiscal year 2024-25, rising to Rs2.9 trillion in FY26, a 62 percent increase. A further Rs1.2 trillion has already been retired in the current fiscal year, he said.
"This reflects a fundamental shift towards active sovereign liability management using improved fiscal space to retire obligations early, reduce refinancing and rollover risks, lower future debt-servicing pressures and strengthen the public debt profile," he added.
The early debt repayments come as the State Bank of Pakistan (SBP) transferred Rs1.9 trillion in profits to the government in FY26, following Rs2.5 trillion in FY25, providing the government with funds to reduce borrowing from banks and the corporate sector.