Pakistan’s foreign debt witnessed a mammoth rise of Rs 403.064 billion (around $3.76 billion at Friday’s inter-bank rate) due to the rupee depreciation since the government took oath in the first week of June this year. In written reply to a question, Finance Minister Ishaq Dar informed the National Assembly Friday that foreign debt, including the $6.64 billion Extended Fund Facility from the International Monetary Fund, raised foreign debt by a whopping Rs 403.064 billion as a result of depreciation of the PKR during the past nearly half a year.
In another written replay, the minister said the PML-N government has been able to obtain financing of $100 million while $65 million amount is expected to be provided shortly for balance of payment and budgetary support. Ishaq Dar said the government borrows funds from domestic and foreign banks from time to time to build foreign exchange reserves and strengthen budgetary position of the country.
The minister said total amount of domestic and foreign loans obtained by the government during 2008-13 stood at Rs 8,136 billion. He said that a total of Rs 6,234.3 billion was procured as domestic loans, Rs 1,256.5 billion as foreign loans, and Rs 645.3 billion was obtained from the IMF. He said the main objective of foreign borrowing is to supplement domestic and external resources required to accelerate the pace of economic development and make positive contribution towards developing the country’s infrastructure base. He said loans from the IMF are mostly obtained for Balance of Payment support. These loans are reflected in foreign exchange reserves of the country and foreign loans would be required until the foreign inflows are higher than the foreign outflows, he added.
The minister said the government financed its fiscal debt through loans. The fiscal deficit has been on average around 7 percent of GDP in the past five years which resulted in high level of debt. The government is committed to reducing the financing gap which will ultimately help reduce dependence on debt in future, he said.
In response to a query the minister said a sum of $6.442 billion has been remitted by overseas Pakistanis from June to October 2013: $1.166 billion was remitted in June 2013, $1.404 billion in July, $1.24 billion in August, $1.283 billion in September and $1.348 billion in October 2013 by overseas Pakistanis working abroad. To enhance foreign remittances through banking system, the government has introduced ‘T.T. Charges Scheme’ under which GoP pays TT charges to commercial banks on account of remittances. For this purpose, the Finance Division has allocated Rs 7.5 billion for 2013-14, he added.
Author: Naveed Butt
Source: Recorder Report