The Ministry of Finance successfully raised more than Rs. 1.2 trillion in a major government bond auction held on Wednesday, including the debut of Pakistan’s first-ever 15-year Zero Coupon Bond. This new bond, which attracted strong investor demand and raised over Rs. 47 billion, pays no annual interest but offers a lump sum repayment at maturity after 15 years.

The introduction of this bond is part of the government’s strategy to reduce short-term repayment pressures and improve financial planning. The strong investor response signals growing confidence in Pakistan’s economy and ongoing reforms.

Yields on other government bonds also declined, reflecting optimism in financial markets about easing inflation and the prospect of lower interest rates ahead. The government aims to reduce borrowing risks, extend debt repayment periods, and promote Islamic and long-term financial products.

Pakistan’s domestic debt profile is becoming more stable, with the average repayment period increasing from 2.7 years last year to 3.75 years currently. Additionally, a broader range of investors, including pension funds and insurance companies, are now participating in government bond markets, helping to diversify financial risk and deepen the local investor base.

Finance Minister Senator Muhammad Aurangzeb described the auction as a “major step forward” in strengthening Pakistan’s financial system. He emphasized the government’s commitment to responsible debt management, expanding Islamic finance options, and attracting long-term investment to support economic growth.

The Ministry of Finance is also developing new bond products aimed at encouraging ordinary citizens to invest, particularly in Islamic financial instruments, to boost savings and financial inclusion.