KARACHI: The government is planning to borrow Rs6.72 trillion through treasury bills and bonds in February-April to help finance the country’s budget deficit.
The majority of the planned borrowing for February through April would be done through Market Treasury Bills with maturities of three, six, and twelve months. The government will raise Rs5.700 trillion via the short-term paper auctions, according to an auction calendar issued by the central bank on Friday.
Between February and April, T-bills worth Rs5.707 trillion will mature.
The sale of Pakistan Investment Bonds (PIBs) with fixed and floating rates will allow the government to borrow Rs1.020 trillion.
To meet its borrowing needs due to a lack of external financing, the government already significantly relies on commercial banks.
Pakistan’s public debt increased 24.2 percent year-on-year to Rs50.9 trillion in November. The debt had stood at Rs40.9 trillion as of November 30, 2021. It rose by 1.5 percent or Rs752 billion month-on-month. The debt was Rs50.1 trillion in October. It was recorded at Rs47.784 trillion at the end of June 2022. One of the main challenges the government faces, according to analysts, is managing its debt obligations.
The government's increased borrowing requirements to meet the budget deficit and a lack of external financing have led to an increase in public debt. Debt servicing is one of the factors contributing to the nation's rising external and fiscal commitments. The rupee's decline versus the dollar affects the costs of foreign borrowing. Analysts claim that as interest rates rise, local borrowing costs rise like this.
A major portion of the public debt is sourced from the domestic debt, which stood at Rs32.9 trillion in November, compared with Rs26.8 trillion a year ago.