Pakistan has met a key condition set by the International Monetary Fund (IMF) by agreeing to extend the average maturity period for both domestic and foreign loans. This step is part of the country’s commitment to structural benchmarks under the ongoing IMF program, sources confirmed.
The decision aims to reduce future financing pressures and create fiscal space. Under the plan, the average maturity of domestic loans will be increased from the current 3 years and 8 months to 4 years and 3 months. For external debt, the timeline will be extended to 6 years and 3 months. The IMF has set a deadline of 2028 for full implementation.
Officials say extending the repayment period will stabilize Pakistan’s debt structure and reduce the need for short-term borrowing. A compliance report will be sent to the IMF before the next economic review.
The process will begin in the current fiscal year, with debt management strategies already being aligned to IMF requirements. Currently, domestic loans have an average maturity of 3.8 years, while foreign loans average 6.1 years.
As part of the agreement, 30% of domestic loans will meet the IMF’s “average time to refix” condition, while another 30% will be issued at fixed policy rates to limit exposure to interest rate fluctuations.
Additionally, Pakistan plans to increase Shariah-compliant financing to 20% over the next three years and cap foreign loans at no more than 40% of the total debt stock to keep external borrowing within sustainable limits.
The IMF has emphasized timely action, and Pakistan has pledged to move forward immediately, with progress updates to be shared during the next review.
