Budgetary support: Govt borrows Rs500bn from banks in 2 weeks: SBP
During the first two weeks of this fiscal year (FY24), the cash-strapped federal government borrowed Rs 500 billion from scheduled banks for budgetary support. The federal government’s borrowing for budgetary support increased by 218 percent during the first two weeks of this fiscal year, according to the State Bank of Pakistan (SBP). The federal government […] The post Budgetary support: Govt borrows Rs500bn from banks in 2 weeks: SBP appeared first on Economy.pk.
Karobar
During the first two weeks of this fiscal year (FY24), the cash-strapped federal government borrowed Rs 500 billion from scheduled banks for budgetary support.
The federal government’s borrowing for budgetary support increased by 218 percent during the first two weeks of this fiscal year, according to the State Bank of Pakistan (SBP).
The federal government borrowed Rs 499.46 billion from scheduled banks between July 1, 2023 and July 14, 2023, an increase of Rs 342 billion over the same time last fiscal year (FY22).
The rigorous research found that, rather of borrowing, the federal government repaid a significant amount to the SBP.
During the first two weeks of this fiscal year, the federal government retired Rs 750 billion to the SBP. The amount retired is approximately 190 percent greater than the prior sum of Rs 258 billion surrendered during the same period last fiscal year.
During the review period, the Balochistan government returned Rs 1.339 billion to the SBP, the Khyber Pakhtunkhwa government returned Rs 2 billion, and the Sindh government reimbursed Rs 8.16 billion to the SBP. To cover its financial demands, the Punjab government borrowed Rs 39.4 billion from SBP.
According to analysts, the federal government has been forced to borrow more from the domestic banking sector due to the growing fiscal deficit. Overall, the federal government intends to borrow more than Rs 11 trillion from domestic resources in the first quarter (Jul-Sept) of FY24 to meet its financial obligations.
This money will be borrowed by the federal government through an auction of security papers such as GoP Ijara Sukuk Fixed Rental Rate (FRR), Pakistan Investment Bonds (PIBs) Fixed Rate, PIBs Floating Rate, and Government of Pakistan Market Treasury Bills (MTBs).
Approximately 78 percent of the financing requirements will be met through the sale of short-term government securities. The federal government planned to raise approximately Rs 8.7 trillion through an auction for MTBs in July-September 2023, compared to the maturing amount of Rs 8.711 trillion.
The post Budgetary support: Govt borrows Rs500bn from banks in 2 weeks: SBP appeared first on Economy.pk.
