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.