Pakistan has fulfilled the International Monetary Fund (IMF) condition for increasing the maturity profile of its debt by withdrawing the short -term borrowing, and the government also hopes to find a foreign dollar loan agreement in April.

The development came warmly on the heels of some improvement of debt indicators, including the expected slowdown at the pace of debt collection to single digits after a long time. The Debt Office, which is now directly reporting to the Financial Secretary, has taken certain initiatives to reduce interest rates and debt refund risks.

Against the IMF’s condition for increasing the current average maturity of debt from two years and eight months, the financial division succeeded in increasing it to three years and three months in December, according to data prepared for the IMF review from Monday.

The first formal program review interview between Pakistan and the IMF begins on March 3 and continues until March 14. Their successful conclusion will lead to the release of the second loan tranche of around $ 1.1 billion.

Pakistan’s performance with regard to debt maturation is much better than the end-June 2025 target set by the IMF. This has reduced both refinancing and interest rate and will also reduce government’s dependence on business banks.

The average time for maturity is the weighted average repayment period for the existing debt. The IMF has pointed to increasing the maturity period to tackle the risk of rollover.

The targeting target has been reached by changing the composition of domestic debts located on RS49 trillion to long-term Pakistan investment bonds (PIBs) while reducing the dependence on short-term government bonds (T-bills), Eraj Hashmi, director of Debt Office, said.

He said that the conscious step not only mitigated rollover risks, but also attracted investors who sought a stable, long-term return, which strengthens the confidence in Pakistan’s debt management strategy.

The Ministry of Finance is also trying to secure a foreign commercial loan of $ 1 billion on the back of a $ 500 million credit guarantee given by the Asian Development Bank (ADB). Pakistan has not been able to get a new foreign commercial loan because of its bad rating. As a solution, it uses the ADB guarantee.

Sources said that London-based business banks had shown interest and the conditions were completed. Among these are standard chartered and Deutsche Bank. A Chinese bank has also shown interest.

The government has also tried to obtain debt from Chinese markets, but it is a long -lasting process and now it hopes to raise up to $ 250 million by next year. Internal assessment shows that Panda bonds will attract about 3.5% interest, which is far lower than up to 8.5% for the issue of Eurobonds.

The finance department has managed to limit debt collection to single digits, helped partially with the reduction in interest. In the last financial year, there was an increase in RS8.4 trillion in the debt stock showing an increase of 13.3%.

The financial department’s assessment is that the debt collection will slow down to less than 9% in this financial year and the net increase will be no more than RS6.3 trillion. It sees public debt growing to RS77.5 trillion by June this year.

During the first half of the current financial year, RS2.8 trillion had been added to the debt stock at a pace of 3.9%.

The Ministry of Finance said it would continue to implement the debt back policy, and next week it would buy pibs back. Previously, it had purchased RS1 trillion value of T-bills, resulting in savings of RS31 billion in interest costs, according to the ministry.

This will continue in the second half of this financial year by buying back bonds instead of T-bills.

The ministry said that in the first six months of the current financial year, it withdrew on RS1.7 trillion of debt, reducing the dependence on business banks. The reason was the pre -payment of RS2.5 trillion in profit from the central bank.

As a result, the T-Bills portfolio fell RS1.5 trillion, which will have a positive impact on next year’s gross financing needs.

Last June, Bank’s had 81% of state securities. Now their holdings made up 67%.

The Ministry of Finance said the government had contained external debt since Prime Minister Shehbaz Sharif took office last March. The total external debt remained stable to $ 86.6 billion in the period, showing effective debt management and reluctance to take unnecessary debt, it added.

The story of Pakistan’s debt is no longer a despair, but of determination, discipline and decisive action, Eraj Hashmi said. Through strategic reforms, the government has slowed down debt collection, he added.

The government also expects to save RS1 trillion due to interest reduction. Against the allocation of RS9.8 trillion, costs can hover around the RS8.7 trillion. In the second half, the estimated interest payment is RS3.6 trillion, the Ministry of Finance said. During the first half, the RS5.1 trillion was used on interest payment.

On Monday, the ministry would take on the first repurchase auction of government bonds. This strategy is in line with international best practices and demonstrates the government’s ability to retire prior to maturity.