Pakistan Fulfills Another IMF Condition

Pakistan has fulfilled a key condition set by the International Monetary Fund (IMF) to extend the average maturity timeline for both domestic and foreign loans, sources told ProPakistani. The move is aimed at reducing the country’s future financing needs and ensuring compliance with the IMF’s structural benchmarks under the ongoing program. According to the plan, the average maturity period for domestic loans will be increased from the current 3 years and 8 months to 4 years and 3 months. Similarly, the average maturity timeline for external debt repayments will be extended to 6 years and 3 months. The IMF has set a deadline of 2028 for the full implementation of this policy. Sources stated that extending the average maturity period will help reduce Pakistan’s financing requirements in the coming years, providing much-needed fiscal space. A report on the implementation of this policy will be submitted to the IMF mission ahead of the next economic review. The process of extending the maturity timeline will begin in the current fiscal year, with the government already working on aligning its debt management strategy with IMF requirements. Currently, the average maturity period for domestic loans stands at 3.8 years, while for foreign loans, it is 6.1 years. Under the new policy, 30% of domestic loans will meet the IMF’s condition for “average time to refix,” ensuring a more stable debt structure. Additionally, approximately 30% of domestic loans will be issued at fixed policy rates, reducing exposure to interest rate volatility. The government also plans to increase the share of Shariah-compliant financing to 20% over the next three years, further diversifying its debt portfolio. Meanwhile, the volume of foreign loans will be capped at no more than 40% of the total debt stock, ensuring that external borrowing remains within sustainable limits. The IMF has emphasized the importance of timely implementation, and Pakistan has committed to initiating the process immediately. A detailed compliance report will be shared with the IMF mission before the next economic review to demonstrate progress on this front.