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Pakistan repaid over Rs4.7trn debt ahead of maturity: Khurram Schehzad
- Govt aims to reduce refinancing and rollover risks, says Finance Minister’s advisor
Pakistan repaid more than Rs4.7 trillion of public debt before maturity through a series of buyback operations, marking the country’s largest-ever proactive liability management exercise, according to Finance Minister’s advisor Khurram Schehzad.
In a post on X, Schehzad said on Tuesday the government’s latest buyback of Pakistan Investment Bonds (PIBs) worth Rs279 billion (around $1 billion) had raised total early debt retirement to Rs4.722 trillion.
He described the operation as the “largest and most sustained liability management operation in Pakistan’s history”.
According to the details shared, Pakistan retired Rs2.9 trillion of debt ahead of schedule during FY26, up 62% from Rs1.8 trillion in FY25. Of the total retired in FY26, 51% comprised central bank debt while the remaining 49% was market debt.
Schehzad said the early retirement of debt was part of an active liability management strategy rather than routine debt repayment.
The approach aims to reduce refinancing and rollover risks, lower debt servicing costs, optimise liquidity and cash flow management, and strengthen investor confidence and fiscal resilience.
He said the government’s debt profile had also improved, with the average debt maturity increasing from 2.7 years in FY24 to more than 3.8 years in FY26.
According to the advisor, Pakistan’s debt-to-GDP ratio has declined from 75% in FY23 to around 68.5% in FY26, while reliance on central bank financing has been reduced significantly.
The buyback operations were carried out in multiple phases, beginning with Rs826 billion in October 2024, followed by transactions in November 2024, March 2025, June 2025, August 2025, November 2025, December 2025, January 2026, April 2026 and the latest Rs279 billion operation in May 2026.
Schehzad said the debt management strategy formed part of broader reforms aimed at strengthening Pakistan’s public finances alongside moderating inflation, improving fiscal and external balances, and enhancing macroeconomic stability.
He said the government was shifting from short-term borrowing towards proactive balance-sheet management focused on reducing financial risks, lowering borrowing costs, and supporting long-term fiscal sustainability.
