Government borrowing up by 165 percent to Rs630 billion

KARACHI: The net government borrowing from financial institutions surged by 165 percent to Rs630.18 billion during the period July 1–November 4 against Rs238.82 billion in the corresponding period last year.

The borrowing for the budgetary support increased by 169 percent to Rs704.41 billion against Rs 261.59 billion, according to the provisional data on the monetary aggregates released by the State Bank of Pakistan (SBP) on Wednesday.

For the budgetary support, the central bank’s lending to the government sectors stood at Rs79.95 billion, down by 56 percent from Rs182 billion last year. The federal government owed Rs31.39 billion during the period against Rs199 billion.

The borrowing from scheduled banks witnessed a phenomenal rise of Rs624.45 billion during the period from Rs79.36 billion.

The borrowing from scheduled banks increased by Rs412 billion in a week from October 29–November 4, mainly because of banks’ investment in the treasury bills, which were auctioned on November 2 in which the SBP sold maturities worth Rs293 billion.

The central bank’s data showed that the borrowing of the private sector during July 1-November 5, 2010 was Rs671 million, but during the current year, the private sector has so far retired Rs31.53 billion to commercial banks against the outstanding credit.

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