Pakistan has recorded its biggest ever early repayment of domestic debt, paying back Rs1.2 trillion to the State Bank of Pakistan (SBP) before the amount was due, according to Khurram Schehzad, adviser to the finance minister.
In a post on X on Saturday, Schehzad said the repayment marked the largest single early debt retirement by the government, exceeding the previous record of Rs1.133 trillion set in August 2025. He added that the latest payment has pushed the total value of domestic debt retired ahead of schedule to more than Rs5.92 trillion.
He said the pace of early repayments has gathered momentum over the past three financial years. According to the figures shared, the government retired Rs1.8 trillion in advance during FY25, followed by Rs2.9 trillion in FY26, an increase of 62 per cent. With the latest Rs1.2 trillion payment already made in FY27, the government has continued the trend of reducing its debt obligations before maturity.
Schehzad said the repayments are part of a broader strategy aimed at improving the country’s public finances through active debt management.
He explained that the government is using the additional fiscal space created through improved financial management to repay liabilities early instead of waiting for their scheduled maturity. This approach is intended to reduce refinancing and rollover risks, lower future debt servicing costs and strengthen Pakistan’s overall debt profile.
According to the adviser, the policy will also create greater fiscal room for economic priorities by easing pressure from future debt repayments.
He said Pakistan is moving beyond simply managing debt maturities and is now taking steps to actively strengthen its sovereign balance sheet through early repayments and more effective liability management.
The latest repayment comes as the government continues efforts to improve fiscal stability and reduce the burden of public debt while maintaining confidence in the country’s financial management.
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