The government has retired Rs. 1.2 trillion in domestic debt owed to the State Bank of Pakistan (SBP) before maturity, marking its largest single early repayment so far.
Finance Minister’s Adviser Khurram Schehzad said the latest repayment raised total domestic debt retired ahead of maturity to more than Rs. 5.92 trillion. He said the government continues to strengthen its public debt management strategy.
The latest repayment also exceeded the previous record of Rs. 1.133 trillion, which the government retired in August 2025. According to Schehzad, the development highlights Islamabad’s growing focus on reducing debt obligations proactively.
Government Accelerates Early Debt Repayments
Pakistan began retiring domestic debt ahead of maturity in October 2024, when it repaid Rs. 826 billion. It followed that payment with Rs. 200 billion in November 2024 and Rs. 273 billion in March 2025.
The government then retired Rs. 500 billion in June 2025 and Rs. 1.133 trillion in August. Further repayments included Rs. 122 billion in November, Rs. 494 billion in December, and Rs. 300 billion in January 2026.
Moreover, authorities retired Rs. 595 billion in April 2026, Rs. 279 billion in May, and the latest Rs. 1.2 trillion in August.
Strategy Targets Debt And Refinancing Risks
Schehzad said early repayments accelerated significantly during the past two fiscal years. Pakistan retired Rs. 1.8 trillion during FY2025 and Rs. 2.9 trillion during FY2026, representing an increase of about 62 percent.
Another Rs. 1.2 trillion has already been retired ahead of maturity during FY2027, he added.
According to Schehzad, the strategy reflects a shift towards active sovereign liability management. The government aims to reduce refinancing risks, ease future debt-servicing pressures, and strengthen Pakistan’s overall public debt position.
