ISLAMABAD (The Thursday Times) — Pakistan’s sovereign Sukuk issuance has passed Rs10 trillion, Finance Minister Muhammad Aurangzeb said on Thursday, as he urged banks and brokers to sell the government’s Islamic bonds to foreign investors, who have so far stayed largely on the sidelines.
Speaking at a ceremony in Islamabad to mark the milestone, Aurangzeb said Sukuk issuance this year had risen by 113 per cent from about Rs2 trillion in 2025. Meezan Bank, which hosted the event, said the government sold Rs4.179 trillion of Sukuk between January and October 31, more than double the previous full-year record of Rs2.052 trillion set in 2025.
Issuance has grown from about Rs761 billion in 2020, the minister said, a compound annual growth rate of around 22 per cent over five years.
Foreign money has not followed. Aurangzeb said inflows through special convertible rupee accounts into Treasury bills and Pakistan Investment Bonds over the past few months had been positive. “However, quite frankly, foreign investment in Sukuk remains underwhelming,” he said, adding that the instruments needed to be actively promoted among international investors.
He also called for more retail buyers through digital platforms, saying individuals could invest as little as Rs5,000.
New instruments
The government has issued Sukuk mostly under the Ijarah structure since 2008, which ties each issue to state-owned assets. To raise more money against the same assets, the finance ministry and the State Bank of Pakistan have introduced a hybrid Sukuk that combines Ijarah with Commodity Murabaha.
The government has also launched tradable three-month and six-month Sukuk. Aurangzeb said these filled a long-standing gap at the short end of the market and would help build a Shariah-compliant yield curve across maturities.
He said a deeper Islamic capital market would need the Securities and Exchange Commission of Pakistan, the State Bank, the Pakistan Stock Exchange, and the Central Depository Company to work together, along with banks and brokers. “As far as the Ministry of Finance and the government are concerned, we are absolutely committed to developing a deep, diversified and liquid Islamic capital market,” he said.
State Bank Governor Jameel Ahmad also spoke at the ceremony, and Justice (retd) Mufti Muhammad Taqi Usmani gave the keynote address.
The push comes as Pakistan tries to widen its pool of lenders and lean less on costly borrowing. The country paid $14.4 billion on its foreign debt last year, including $3.2 billion in interest.
