ISLAMABAD: Pakistan’s Ministry of Finance has raised over PKR 1.2 trillion through a major auction of government bonds on Wednesday, including the launch of a new 15-year Zero Coupon Bond.
The bond first of its kind in Pakistan, received strong demand from investors and raised over PKR 47 billion.
According to the official news agency APP, this new bond does not pay interest every year. Instead, investors receive a lump sum at the end of 15 years.
This helps the government to reduce short-term repayments and plan finances better. The strong response shows that investors are confident in Pakistan’s economy and reforms.
This initiative is part of the government’s wider strategy to reduce borrowing risks, extend the maturity profile of public debt, and encourage the use of Islamic and long-term financial instruments.
Yields on other government bonds have also declined, reflecting growing market confidence in easing inflation and the prospect of lower interest rates.
Pakistan’s debt profile is showing signs of improved stability. The average maturity of domestic debt has increased from 2.7 years last year to 3.75 years, easing short-term repayment pressures.
Additionally, a more diverse range of investors—including pension funds and insurance companies, not just banks—is now participating in government bond markets.
This diversification helps spread financial risk and strengthens the domestic investor base.
Finance Minister Senator Muhammad Aurangzeb said: “This is a major step forward in making Pakistan’s financial system stronger and more resilient. We are introducing new, smart ways of borrowing that reduce risk and give investors more options. Our aim is to manage public debt responsibly, promote Islamic finance, and attract more long-term investment to support the country’s economic growth.”
The Ministry of Finance is also working on more products to allow ordinary citizens to invest in government bonds, especially Islamic ones, to encourage savings and financial inclusion.
He said that despite global uncertainties, the auction shows that Pakistan’s economy is gaining investor trust and moving in the right direction.
