Govt borrowing from banks almost doubles – Newspaper

KARACHI: Government loans from scheduled banks increased 99 percent in a week and ended September 13, the State Bank reported Monday.

During the week of September 6 to 13, government loans increased by Rs443.5 billion to Rs899bn. This is almost equal to the amount borrowed (Rs455.8bn) from July 1 to September 6.

The State Bank report indicates that the government borrowed aggressively during the week and added around Rs443.5bn in its debts of the scheduled banks.

Aggressive loans began in mid-July when the State Bank completed its monetary adjustment cycle and increased the key discount rate by one percentage point. Public debt auctions had remained mediocre for almost a year and a half until then.

This year, the loan situation has changed compared to last year that emerged from the agreement with the IMF. The government borrows from scheduled banks and withdraws SBP debts from the beginning of the current fiscal year.

During the same period last fiscal year, the government withdrew Rs1.238bn from the programmed banks, but this year the government has so far removed Rs625bn from the State Bank.

The private sector withdrew Rs115.7bn until September 13, which was Rs86bn until September 6. However, last year the private sector had borrowed Rs16.5bn during the same period.

Posted on Dawn, September 24, 2019

Source: https://www.dawn.com/news/1507031/govt-borrowing-from-banks-almost-doubles

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