ISLAMABAD: Pakistan has raised Rs10 trillion — about $36 billion — through sovereign Islamic bonds, Finance Minister Muhammad Aurangzeb announced on Thursday, describing the milestone as a major step for the country’s Islamic finance market.
According to a post on X by the Finance Ministry, Sukuk issuance reached Rs4.4 trillion (about $15.86 billion) in 2026. The figure represents a 113 per cent increase from approximately Rs2 trillion (about $7.20 billion) the previous year, the minister said.
Figures shared at a ceremony in Islamabad marking the milestone put issuance at Rs4.179 trillion between January and 31 October 2026, more than double the previous annual record of Rs2.052 trillion issued in all of 2025. The government Sukuk portfolio has now crossed Rs10 trillion in both outstanding value and total issuance.
The minister said the sector has grown at an average annual rate of about 22 per cent over the past five years, rising from about Rs761 billion (about $2.74 billion).
New structures widen the market
According to the Finance Ministry, the Ministry of Finance and the Debt Management Office worked with the State Bank of Pakistan to introduce hybrid government Sukuk that align with various Shariah principles. Since 2008, government Sukuk had been issued mainly under the Ijarah structure, which ties issuance to the availability of tangible state assets. The hybrid structure combines Ijarah with Commodity Murabaha, allowing the same asset base to support a larger volume of issuance.
The government has also introduced short-term Sukuk with durations of three to six months. According to the organisers of the Islamabad ceremony, the launch of tradable three- and six-month Sukuk has addressed a longstanding gap at the short end of the sovereign Islamic yield curve, providing benchmarks for pricing across the wider Islamic finance market.
Retail investors and foreign participation
The finance minister pledged to broaden retail and foreign participation in the Sukuk market. He urged expanding Sukuk through digital and telecommunication platforms so that ordinary citizens can invest as little as Rs5,000 (about $18).
Foreign investment in Sukuk remains below expectations despite a positive trend in Treasury Bills and Pakistan Investment Bonds, according to the minister. He said banks, brokers and primary dealers must promote these instruments to international investors.
The minister said the Ministry of Energy has ordered the National Grid Company, a state-owned utility, to issue its first listed Sukuk to establish a benchmark for other corporate entities. To stabilise the market, he said the Securities and Exchange Commission of Pakistan, the State Bank of Pakistan, the Pakistan Stock Exchange and the Central Depository Company must collaborate.
The milestone was commemorated at a gathering in Islamabad organised by Meezan Bank, attended by the finance minister as chief guest and State Bank Governor Jameel Ahmad. Representatives of the Ministry of Finance, the State Bank and the joint financial advisers — Dubai Islamic Bank (Pakistan), Bank Islami Pakistan and Bank Alfalah — also attended.
Aurangzeb said Islamic finance grows through scholarly effort and the application of Ijtihad, or independent legal reasoning, to address new economic challenges, adding that a collaborative environment is necessary to exchange knowledge and debate evolving financial circumstances.