The Ministry of Finance (MoF) has refuted recent media claims that the State Bank of Pakistan (SBP) provided the federal government with an illegal Rs. 239 billion amount. The Ministry stated that the news story by a think tank was not verified with them before publication.
MoF has also confirmed that SBP has not violated any laws, specifically the SBP Act of 1956, which was referenced in the misleading news article.
According to the Ministry, the news story is based on an economic think tank report by Prime Institute, located in Islamabad. The report was made from data on loans found on the SBP’s website.
However, the data was misunderstood and the table mentioned in the report is calculated using the accrual method, which includes interest earned over time and exchange rate changes related to lending Special Drawing Rights Allocation from the International Monetary Fund (IMF) to the government.
The total amount of loans given is reduced by the number of government deposits held by the SBP, according to the MoF.
In addition, the increase in net credit to the government sector by Rs. 239 billion is due to three factors, the Finance Ministry explains. These include interest earned (Rs. 110 billion), the impact of exchange rate changes (Rs. 84 billion), and the decrease in government deposits with the SBP (Rs. 45 billion). It is essential to note that no new loans have been given to the government since the SBP Amendment Act of 2022.
Furthermore, MoF clarified that the government has paid back Rs. 2,017 billion of debt to the SBP since it ceased borrowing money from them.
