Government repays Rs. 750 Billion to SBP, borrows Rs. 500 billion from scheduled banks

 

Government repays Rs. 750 Billion to SBP, borrows Rs. 500 billion from scheduled banks

In the period from July 1 to July 14 of the current fiscal year, the government borrowed approximately Rs. 500 billion from scheduled banks. At the same time, it repaid Rs. 750 billion to the State Bank of Pakistan (SBP).

According to the latest figures released by the central bank, the government's borrowing from scheduled banks has seen a significant increase of 218% compared to the same period in the previous fiscal year, with lending from scheduled banks reaching Rs. 499.46 billion. In the entire fiscal year 2022-23, the total borrowing was Rs. 157.44 billion.

On the other hand, the federal government retired a substantial amount of Rs. 750 billion to the SBP during the same period, a notable increase of 190% compared to Rs. 258 billion repaid last year.

Despite the increase in borrowing from commercial banks, the government has emphasized its ability to meet financial obligations, a position consistently presented by Finance Minister Ishaq Dar. He had assured that Pakistan would never default and had successfully repaid all loans on time.

However, the increase in borrowing reflects the fiscal deficit challenge, which may present complexities in managing the country's financial affairs during the current financial year, which has just begun.

For 2023-24, the government has set a budget deficit target of 6.54%, with the Finance Minister stating that the budget was prepared responsibly, not as an election budget.

Source: Dunya News