Govt Bases FY27 Borrowing Plan on Rs. 290/Dollar Exchange Rate

The Pakistani government has outlined its financing plan for fiscal year 2026 to 2027, projecting gross borrowing needs of Rs. 28.647 trillion. Most of the Rs. 7.02 trillion fiscal deficit is expected to be covered through domestic borrowing. The government has set an exchange rate of Rs. 290 per dollar for the upcoming fiscal year.

The Annual Borrowing Plan indicates that net domestic borrowing will comprise Rs. 6.046 trillion, while net external financing is anticipated to be Rs. 813 billion. Privatization proceeds are estimated at a further Rs. 161 billion. To mitigate refinancing risks, the government aims to shift from short-term Treasury Bills to medium- and long-term borrowing instruments, extending debt maturity.

Among the projected issuances, Pakistan Investment Bonds are expected to account for more than half of the new issuance, with fixed-rate PIBs making up more than half of new issuances. Government Ijara Sukuk, Bai Muajjal, and short-term Sukuk are also part of the plan, with gross Sukuk issuance reaching about Rs. 6.6 trillion. The government intends to introduce a 20-year fixed coupon bond and replace the existing 10-year zero-coupon floating rate instrument with a 10-year fixed rate instrument.

The debt maturity requirements amount to Rs. 21.627 trillion, encompassing Rs. 17.096 trillion in domestic maturities and Rs. 4.531 trillion in external repayments. Overall, gross financing needs for the fiscal year add up to Rs. 28.647 trillion.