Government to secure Rs. 6 trillion from banks in next three
months
The government has outlined plans to secure Rs6 trillion
from banks over the next three months, as revealed by central bank data on
Friday. The funding will be sourced through treasury bills and a mix of
conventional and Islamic bonds, aimed at addressing the fiscal deficit.
According to the State Bank of Pakistan's auction calendar,
the government intends to raise Rs3.464 trillion from short-term treasury bills
maturing in three, six, and 12 months between December and February.
Additionally, Rs2.360 trillion will be borrowed through long-term Pakistan
Investment Bonds (PIBs) featuring fixed and floating rates, with tenors
spanning three, five, 10, 15, and 20 years. To tap into the Islamic banking
sector, the government will issue Rs60 billion worth of variable rental rate
Ijarah sukuk and Rs50 billion worth of fixed rental rate sukuk, both with
three- and five-year maturities.
Pakistani
government seeks Rs8.5 trillion in loans from banks to address budget shortfall
While this borrowing plan is less ambitious than the Rs8.501
trillion borrowed in the previous three months, analysts attribute the
reduction to improved revenue collection and decreased government spending.
Notably, the government anticipates receiving $700 million from the
International Monetary Fund (IMF) in January as part of a $3 billion loan
program.
In the initial four months of the fiscal year 2023/24, the
Federal Board of Revenue collected Rs2.748 trillion in taxes, slightly below
the Rs2.782 trillion target. Analysts also noted that the government exceeded
its fundraising goals at recent PIB floater auctions, suggesting a concerted
effort to shift debt maturity from short-term to medium-term instruments.
Government's
plan to secure Rs11.09 trillion from banks
The government's consistent reliance on significant bank
loans is driven by escalating spending, increasing interest rates, and limited
foreign funding. Banks, responding to the government's financial needs, have
made substantial investments in government securities, resulting in substantial
returns on these investments.
Source: The News