Pakistan has met a key requirement set by the International Monetary Fund (IMF) by committing to extend the average maturity period for both domestic and foreign loans.
The move is designed to reduce the country’s future financing needs and align with the IMF’s structural benchmarks under the ongoing loan program. Under the plan, the average maturity of domestic debt will be extended from the current 3 years and 8 months to 4 years and 3 months, while the repayment period for external debt will increase from 6.1 years to 6 years and 3 months. The IMF has set 2028 as the deadline for full implementation.
Officials say the longer repayment timelines will ease Pakistan’s financing pressures in the coming years and create fiscal breathing room. A formal report on the progress will be submitted to the IMF before its next economic review. Work on the new debt management approach will start this fiscal year, with the government already adjusting its strategy to meet IMF conditions.
As part of the reforms, 30% of domestic loans will be structured to meet the IMF’s “average time to refix” condition, helping stabilize the debt profile. Another 30% will be issued at fixed policy rates to reduce exposure to interest rate fluctuations. The government also plans to increase Shariah-compliant financing to 20% of total debt within three years and limit foreign loans to no more than 40% of the total debt stock to ensure sustainability.
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The IMF has stressed timely execution of the policy, while Pakistan has pledged to begin implementation immediately. A detailed compliance report will be provided to the IMF mission ahead of the next review to demonstrate progress.