Pakistan Extends Loan Maturity Periods to Meet IMF Requirements
Pakistan has taken an important step toward meeting the International Monetary Fund’s (IMF) conditions by extending the average maturity timelines for both domestic and foreign loans, sources confirmed to ProPakistani.
This move aims to reduce Pakistan’s future financing needs and align with the IMF’s structural benchmarks under the ongoing program.
Under the new plan, the average maturity for domestic loans will increase from 3 years and 8 months to 4 years and 3 months. Meanwhile, the average maturity for external debt repayments will be extended to 6 years and 3 months. Full implementation of this policy is targeted by 2028.
Officials say this extension will ease Pakistan’s financing requirements in the coming years and create much-needed fiscal space. A progress report on this policy will be submitted to the IMF ahead of the next economic review.
The government is set to begin the maturity extension process in the current fiscal year, adjusting its debt management strategy to meet IMF guidelines. Currently, the average maturity stands at 3.8 years for domestic loans and 6.1 years for foreign loans.
As part of the new framework, 30% of domestic loans will have an “average time to refix,” helping stabilize the debt structure. Around 30% of domestic loans will also be issued at fixed policy rates, reducing vulnerability to interest rate fluctuations.
Additionally, Pakistan plans to increase Shariah-compliant financing to 20% within three years, diversifying its debt portfolio further. Foreign loans will be capped at no more than 40% of the total debt to keep external borrowing sustainable.
The IMF has stressed timely implementation, and Pakistan has committed to starting the process immediately. A detailed compliance report will be shared ahead of the upcoming IMF economic review.
