Pakistan issues over $7 billion sukuk in 2025, nears 20 percent Shariah-compliant debt target

A money changer counts Pakistan's currency at a market in Karachi on January 6, 2023. (AFP/ file)
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Updated 29 December 2025
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Pakistan issues over $7 billion sukuk in 2025, nears 20 percent Shariah-compliant debt target

  • Finance Adviser Khurram Schehzad says this was the highest-ever Sukuk issuance in a single calendar year since 2008
  • Pakistan’s Federal Shariat Court ordered in 2022 the entire banking system to transition to Islamic principles by 2027

ISLAMABAD: Pakistan’s Finance Adviser Khurram Schehzad on Monday said the country achieved a landmark breakthrough in Islamic finance by issuing over Rs2 trillion ($7 billion) sukuk this year, bringing it closer to its 20 percent Shariah-compliant debt target by Fiscal Year 2027-28.

A sukuk is an Islamic financial certificate, similar to a bond, but it complies with Shariah law, which forbids interest. Pakistan’s Federal Shariat Court (FSC) had directed the government in April 2022 to eliminate interest and align the country’s entire banking system with Islamic principles by 2027.

Following the ruling, the government and the State Bank of Pakistan (SBP) have undertaken a series of measures, including legal reforms and the issuance of sukuk to replace interest-based treasury bills and investment bonds.

“In 2025, the Ministry of Finance (MoF) through its Debt Management Office, together with its Joint Financial Advisers (JFAs), successfully issued over PKR 2 trillion in Sukuk,” Schehzad said on X, describing it as “the highest-ever Sukuk issuance in a single calendar year since 2008 by Pakistan.”

Pakistan made a total of 61 issuances across one-, three-, five- and 10-year tenors, according to the finance adviser. The country also successfully launched its first Green Sukuk, a Shariah-compliant bond designed to fund environment-friendly projects.

He said the Green Sukuk was 5.4 times oversubscribed, indicating investor demand was more than five times higher than the amount the government planned to raise, which showed strong market confidence.

“The rising share of Islamic instruments in the government’s domestic securities portfolio (domestic debt) underscores strong momentum, growing from 12.6 percent in June 2025 to around 14.5 percent by December 2025, clearly positioning the MoF to achieve its 20 percent Shariah-compliant debt target by FY28,” Schehzad said.

“This milestone also reflects the structural deepening of Pakistan’s Islamic capital market, sustained investor confidence, and the strengthening of sovereign debt management.”

He said Pakistan was strengthening its government securities market by making it more resilient, diversified, and future-ready, supported by a stabilizing macroeconomic environment, a disciplined debt strategy, and a clear roadmap for Islamic finance.


Pakistan, Iran seek to boost economic cooperation through agriculture, improved connectivity

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Pakistan, Iran seek to boost economic cooperation through agriculture, improved connectivity

  • Pakistan-Iran trade has hovered around $3 billion in recent years, with both countries pledging to take it to $10 billion
  • Pakistan minister says improved connectivity, streamlined procedures and practical coordination can help achieve target

KARACHI: Pakistan and Iran on Tuesday agreed to step up cooperation in agriculture and food security with a focus on improving connectivity and streamlining procedures to boost broader economic ties, the Pakistani food security ministry said.

Trade between Pakistan and Iran has hovered around $3 billion in recent years and both countries signed a memorandum of understanding (MoU) in Feb. 2025 to take it to $10 billion.

Iran was prioritizing Pakistan’s rice, meat and other exports as part of a trade understanding reached between the two countries in Tehran, the Pakistani government said in Aug. last year.

On Tuesday, Iran’s agriculture minister Gholamreza Nouri Ghezeljeh met Pakistani food security and commerce ministers in Islamabad to advance bilateral cooperation in agriculture and food security.

“Federal Minister for Commerce Jam Kamal Khan also highlighted the importance of facilitating cooperation through improved connectivity, streamlined procedures, and practical coordination at the operational level,” the Pakistani food security ministry said.

“He emphasized that sustained engagement and mutual understanding would help unlock the full potential of bilateral relations across multiple sectors.”

Pakistan’s food security minister emphasized that agriculture remains a vital sector for ensuring food security, rural development, and economic stability in both countries, urging enhanced technical cooperation, exchange of expertise and strengthened coordination between relevant departments and research institutions.

The Iranian minister suggested closer cooperation in horticulture, livestock, crop management, and modern farming practices, noting that both countries possessed complementary strengths and could benefit from structured collaboration, joint initiatives and regular institutional dialogue, according to the Pakistani ministry.

Matters relating to agricultural exchange, research collaboration, capacity building, and facilitation of farmers and agri-business stakeholders were also discussed.

“The two sides acknowledged the need to promote joint research in areas such as water conservation, high-value crops, livestock improvement, and sustainable agricultural practices in view of shared climatic and environmental challenges,” the Pakistani food security ministry said.

“The ministers discussed ongoing collaboration under existing agreements, including cooperation in veterinary and animal health, plant protection and quarantine. Both sides agreed on the importance of effectively implementing signed agreements and expediting pending institutional mechanisms to ensure consistent progress.”