Fiscal Milestone: Pakistan Repays Record Rs 3.6 Trillion Domestic Debt Before Maturity. -

In an unprecedented move for the country’s financial history, Pakistan has successfully repaid over Rs 3,654 billion ($13.06 billion) of its domestic debt before its scheduled maturity. Khurram Schehzad, Advisor to the Federal Minister for Finance, confirmed that this early retirement journey reflects a “decisive shift” toward fiscal discipline and responsible economic management.Key Highlights of the Debt Retirement Journey:

The Timeline: The early repayment process began in late 2024, with major tranches retired in December 2024 (Rs 1,000 billion), June 2025 (Rs 500 billion), and August 2025 (Rs 1,160 billion).
Latest Payment: A trancé of Rs 300 billion was paid to the State Bank of Pakistan (SBP) on Thursday, January 29, 2026.
Central Bank Debt Slashed: This strategy has reduced outstanding SBP debt by nearly 44%, bringing it down from approximately Rs 5.5 trillion to just Rs 3 trillion.
Massive Taxpayer Savings: The early retirement and debt switches have saved taxpayers over Rs 850 billion in interest costs during FY25, with similar savings expected in FY26.
Extended Maturity: The average maturity of domestic debt has improved significantly, rising from 2.7 years to over 4 years—the sharpest single-year improvement in the country’s history.
Debt-to-GDP Improvement: Pakistan’s debt-to-GDP ratio, which stood at around 74% in FY22, has declined to approximately 70% as of late 2025.

Officials emphasize that by prioritizing early repayments and risk reduction, Pakistan is breaking away from decades of debt-heavy practices and sending a strong signal of economic credibility to global markets.