Pakistan pays Rs500 billion SBP debt earlier than schedule
In a significant fiscal development, Pakistan has successfully repaid Rs500 billion in debt owed to the State Bank of Pakistan (SBP)—four years ahead of its scheduled maturity in 2029.
The early repayment was announced by Khurram Shehzad, Adviser to the Finance
Minister, via a post on social media platform X. He described the move as a
reflection of the government's disciplined, proactive, and forward-looking
approach to financial governance.
“This prepayment not only reduces concentration risk and future liabilities
but also strengthens Pakistan’s macroeconomic stability by cutting reliance on
central bank borrowing,” Shehzad stated.
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resolves circular debt with historic Rs1.275 trillion Islamic financing deal
Major Step Toward Energy Sector Reform
In a related development, Shehzad highlighted the resolution of Pakistan’s
chronic circular debt through a landmark Rs1.275 trillion Islamic financing
agreement involving 18 commercial banks. The agreement is being hailed as a
cornerstone of the Shehbaz Sharif administration’s energy sector restructuring.
The financing deal is structured to eliminate circular debt through:
·
Rs683 billion allocated for the Power Holding Company
·
Rs592 billion for Independent Power Producers (IPPs)
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set to get loan of Rs1.275 trillion from banks to resolve circular debt
The loan was secured at a concessional rate, set at 0.9% below the three-month KIBOR, aligning with the government’s target to transition to interest-free banking by 2028.
These developments collectively represent a bold fiscal strategy to tackle
long-standing structural issues, reduce debt dependence, and stabilize the
national economy.
Source: ARY News