- Khurram Shehzad claims MoF clears Rs1.63trn owed to SBP in just 59 days, calling it a ‘historic first’
- Says disciplined strategy saves taxpayers Rs800bn, extends debt maturity to record 3.8 years
ISLAMABAD: In a landmark step for fiscal discipline, the Ministry of Finance (MoF) has retired more than Rs1,600 billion of debt owed to the State Bank of Pakistan (SBP) within just 59 days, taking total early repayments across domestic liabilities to over Rs2,600 billion—an unprecedented achievement in Pakistan’s financial history.
According to Advisor to the Finance Minister Khurram Shehzad, the ministry retired Rs500 billion on June 30, 2025, followed by another Rs1,133 billion on August 29, bringing the total early retirement of SBP debt to Rs1,633 billion. He announced the development through his official X handle.
Earlier, during the first half of FY25, the government had already retired Rs1,000 billion of commercial market debt — the first such advance repayment operation ever carried out in the country. Combining both central bank and commercial liabilities, the cumulative early debt retirement in less than a year has now surpassed Rs2,600 billion.
“This marks a decisive shift from past debt-heavy practices, where reliance on excessive borrowing crowded out fiscal space and heightened risks,” Shehzad said, adding that “strengthening public finances through early debt retirement is restoring fiscal credibility.”
He highlighted that nearly 30% of SBP debt has been retired well ahead of its 2029 maturity, reducing the central bank’s exposure from Rs5.5 trillion to Rs3.8 trillion in just two months. The move has eased refinancing pressures for 2029, lowered rollover risks, and created more fiscal space for development spending.
The average maturity of domestic debt has also increased sharply to 3.8 years from 2.7 years in FY24—the steepest single-year improvement on record, exceeding IMF targets. Meanwhile, disciplined early repayments coupled with falling interest rates have already delivered taxpayer savings of over Rs800 billion in FY25.
Shehzad described the initiative as a shift “from borrowing to responsibility,” saying this was not only debt repayment but a demonstration of forward-looking financial governance. “By breaking the cycle of unchecked borrowing and prioritizing repayment, Pakistan is restoring credibility, strengthening resilience, and building a sustainable economic future,” he remarked.
