Govt. borrows Rs.1.9 trillion from SBP in a week

August 28, 2019 (MLN): The government of Pakistan has retired an additional sum of Rs.36.84 billion during the week ended August 17, 2019, which brings its total net retirement for ongoing fiscal year FY2020 to Rs.61.5 billion. As of prior week, the government had retired a net sum of Rs.24.66 billion.

According to the State Bank of Pakistan's weekly estimates in this regard, this year's overall net retirement as of this week has decreased by Rs.111.37 billion over the year as last year's net retirement for the same period stood at Rs.172.88 billion.

The government sector borrowings are divided into three broad categories based on the purpose of loan which are budgetary support, commodity operations and others.

Split three ways between these broad categories, the cumulative net retirement off budgetary support was Rs.53.13 billion, that for commodity operations stood at Rs.7.55 billion. whereas Rs.817.33 million (net) were retired off other miscellaneous operations.

The two biggest source of financing for budgetary support are the State Bank of Pakistan and the Scheduled Banks. This week, outstanding T-bills worth Rs.3.2 trillion reached maturity. To retire this amount, the government had held auctions a week before in which it sold T-Bills worth Rs.1.3 trillion. In order to retire the remaining amount to commercial banks, the government resorted to borrowing Rs.1.9 trillion from the central bank.

Resultantly, the central bank's loan to the government in this fiscal year has reached a net sum of Rs.529.69 billion as until last week, Rs.1.4 trillion were retired to SBP. Out of the total amount borrowed from SBP, the Federal Government borrowed Rs.612.07 billion whereas, the Provincial Government retired Rs.73.51 billion, AJK Government retired Rs.6.82 billion, and the GB Government retired Rs.2.05 billion.

On the other hand, the Scheduled Banks were retired a net of Rs.582.83 billion out of which the Federal Government retired Rs.580.67 billion while the Provincial Government retired Rs.2.15 billion.

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Posted on: 2019-08-28T17:53:00+05:00