Govt Debt Reduces by Rs. 992 Billion to Below Rs. 50 Trillion On Massive PKR Jump

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The total federal government debt stock was reduced by Rs. 992 billion during August 2022 due to the devaluation of the US Dollar against the Pakistani Rupee (PKR).

According to the report released by the State Bank of Pakistan (SBP), the total central government debt was reduced by Rs. 992 billion from Rs. 50.5 trillion in July 2022 to Rs. 49.5 trillion during August 2022.

The central bank calculated the average value of the US$ as Rs. 240 in July which dropped as low as Rs. 219 in August. The report shows that the greenback depreciated by almost Rs. 21 in August as compared to July 2022 when the foreign debt owed by the government of Pakistan was initially recorded.

According to SBP data, the foreign debt of the federal government decreased by Rs. 1.95 trillion to Rs. 17.42 trillion in August. Meanwhile, the long-term foreign loans owed by the federal government decreased by Rs. 1.89 trillion to Rs. 17.215 trillion, while the short-term loans squeezed by Rs. 63 billion from Rs. 267 billion to Rs. 204 in August as compared to July.

According to the central bank, the government loans taken from local sources increased by Rs. 964.6 billion from Rs. 31.13 billion to Rs. 32.098 trillion on monthly basis.

The government loans taken against GOP Ijara Sukuk increased by Rs. 68 billion to Rs.2.383 trillion. Government borrowing increased by Rs. 756 billion from Rs. 17.31 trillion to Rs. 18.071 trillion through the floating of Pakistan Investment Bonds.

Federal government loans increased by Rs. 1.7 billion to Rs. 376.2 billion raised through Prize Bonds. Additionally, borrowing through Saving Schemes decreased by Rs. 36 billion to Rs. 3.09 trillion in August 2022. The federal government obtained an extra Rs. 178 billion in August 2022 through Market Treasury Bills, taking loans against MTBs to Rs. 7.431 trillion.

The government obtained Rs. 100 million through the floating of Naya Pakistan Certificates (NPCs) in August 2022.

According to SBP, the long-term loans taken from local sources increased by Rs. 786 billion to Rs. 24.56 trillion, while the short-term loans reached Rs. 7.48 trillion with an increase of Rs. 179 billion during August 2022.

It should be noted that the government’s external debt does not include the IMF and other government financial guarantees given on local and foreign loans.



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