ISLAMABAD: In a significant development for Pakistan’s financial landscape, the Ministry of Finance has raised over Rs1.2 trillion through a major auction of government bonds, including the launch of a historic 15-year Zero Coupon Bond.
This is the first time such a long-term, interest-free bond has been offered in Pakistan.
The 15-year bond alone attracted over Rs47 billion in investor interest, reflecting strong confidence in the country’s economic stability and reform measures.
Unlike traditional bonds, the new Zero Coupon Bond does not pay annual interest.
Instead, investors receive a lump-sum payment at maturity.
This structure allows the government to delay repayments and manage its cash flow more effectively,
while offering investors a long-term, tax-efficient option.
The bond’s success signals renewed trust in Pakistan’s macroeconomic outlook.
Strategic Shift Toward Long-Term Borrowing
This bond issuance is part of a broader strategy to reduce borrowing risks and extend Pakistan’s domestic debt maturity profile.
The average repayment period of domestic debt has already increased from 2.7 years last year to 3.75 years.
This reduces the government’s pressure to meet short-term debt obligations and improves fiscal predictability.
Additionally, yields on other government bonds declined following the auction.
This indicates investor optimism about declining inflation and future interest rate cuts.
Another positive shift is the growing participation of non-bank financial institutions like pension funds and insurance companies, which are now playing a bigger role in public debt investment—enhancing financial resilience.
Inclusive Financial Growth Ahead
Finance Minister Muhammad Aurangzeb hailed the move as a milestone for Pakistan’s financial system.
He emphasized that the government is committed to smart, responsible borrowing.
Plans are also underway to introduce more public investment products, especially Shariah-compliant bonds, to increase citizen participation and financial inclusion.
These initiatives are expected to further deepen the capital market and support long-term economic growth.
Despite global economic challenges, today’s bond auction marks a new era of financial confidence in Pakistan.
