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ISLAMABAD, Aug 31 (APP):In an unprecedented move and a record achievement for fiscal responsibility, the Ministry of Finance (MoF) has retired over Rs 1,600 billion of debt owed to the State Bank of Pakistan (SBP) in just 59 days, with total early repayments across all domestic liabilities now exceeding Rs 2,600 billion.
“On June 30, 2025, the Ministry early-retired Rs.500 billion. Only two months later, on August 29, the Debt Management Office executed another monumental repayment of Rs.1,133 billion, which brings the total early retirement of SBP debt to Rs.1,633 billion”, Advisor to the Finance Minister Khurram Schehzad posted on his official X handle.
The Ministry had earlier in 1H FY25 retired domestic commercial market debt of Rs 1,000 billion, the first such advanced debt retirement operation in Pakistan’s history.
Including both the central bank and commercial portions, the total early debt retirement in less than one year now comes to over Rs 2,600 billion an unprecedented scale and decisive action in the country’s fiscal history.
“Strengthening public finances through early debt retirement restoring fiscal credibility”, he added.
He said this action marks a decisive shift from past debt-heavy practices, where reliance on borrowing crowded out fiscal space and increased risks.
Now, debt discipline is firmly in action includes 30% of SBP debt retired early in just under two months, Pakistan cut SBP debt from Rs 5.5 trillion to 3.8 trillion nearly 30% retired well before its 2029 maturity.
Reduced risks, improved fiscal space: early repayments eased the 2029 refinancing burden, lowered rollover risks, and created more room for development spending.
Strengthened fiscal resilience: the average maturity of domestic debt has risen to 3.8 years from 2.7 in FY24, the sharpest single-year improvement in history, and well ahead of the IMF target.
Major taxpayer savings: with falling rates and disciplined, early repayments, the government has already secured over Rs +800 billion in taxpayer savings (FY25).
He said a shift from borrowing to responsibility, this is not just debt repayment it is responsible, forward-looking financial governance. By reversing the old cycle of unchecked borrowing and putting repayment at the center of fiscal management, Pakistan is restoring credibility, strengthening resilience, and building a more sustainable future.