Pakistan plans to refinance short-term external debt into longer maturities to reduce rollover risks

Finance Minister Muhammad Aurangzeb told Bloomberg News on Monday that Pakistan intends to shift part of its short-term external borrowing into longer-dated liabilities in the coming two to three years. Profit by Pakistan Today reported that the shift would cut exposure to frequent refinancing, while total external debt would be kept close to $100 billion. Aurangzeb said the priority is improving the maturity profile of foreign debt instead of increasing total borrowing, and that Pakistan faces no immediate need to close its external financing gap this fiscal year.

Aurangzeb said mandates have already been issued for Islamic Sukuk and a new rupee-denominated bond settled in US dollars, drawing interest from potential investors. Requests for proposals are being prepared for the remaining Panda bonds, which would tap China's domestic bond market, and the government is exploring tokenisation of its Eurobonds for the first time. He added that Pakistan has no urgent need to borrow from global bond markets during this fiscal year.

Aurangzeb heads Pakistan's delegation to the IMF and World Bank Group Annual Meetings in Bangkok, which run from October 12 to 18. According to the Finance Division, his trip includes more than 60 engagements with lenders, investors and credit rating agencies, among them Fitch Ratings, Moody's and S&P Global. The stated goal is to highlight macroeconomic stabilisation and the shift toward growth led by investment and exports.