Govt. retires Rs.105 billion in a week

August 02, 2019 (MLN): The government of Pakistan has retired an additional sum of Rs.104.56 billion during the week ended July 26, 2019, which brings its total net retirement for ongoing fiscal year FY2020 to Rs.165.28 billion. As of prior week, the government had retired a net sum of Rs.60.72 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.152.12 billion over the year as last year's net retirement for the same period stood at Rs.317.4 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.156.66 billion, that for commodity operations stood at Rs.8.28 billion. whereas Rs.334.77 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 fiscal year, the central bank has been retired a net sum of Rs.1.29 trillion by the government, out of which the Federal Government retired Rs.1.19 trillion, the Provincial Government retired Rs.88.68 billion, AJK Government retired Rs.4.79 billion, and the GB Government retired Rs.1.68 billion.

On the other hand, the Scheduled Banks have lent out a net total of Rs.1.13 trillion to the Federal Government which shows a clear transition between the government's borrowing avenues in FY19 and in the current year as it makes a shift from central bank to scheduled banks.

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