The latest Bureau of the Treasury data showed that the national government's combined domestic and external borrowings
from January to June climbed from P460.8 billion a year ago.
When Pakistan negotiated with the IMF regarding the loan, they had discussed the borrowing
issue with them and the government had agreed to gradually reduce its stock of borrowings
from the SBP.
Based on BTr data, the government's debt from domestic sources amounted to P55.908 billion, while external borrowings
reached P75.178 billion during the period.
The National Treasurer explained that there may be a decline in the domestic borrowings
for the next quarter as the government still has a healthy cash buffer following the success of its fund raising activities both in the onshore and offshore markets in the first two quarters of the year.
The review of the relevant literature shows that while there are a number of studies which have analysed the role of monetary and fiscal policies in inflation, no study has been conducted on the relationship between the sources of the deficit finances (bank borrowings
from commercial banks, borrowings
from central bank and nonbank borrowings
for fiscal deficit financing) and inflation.
A peep into the history indicates that the stock of borrowings
from SBP was at 10.0 percent of GDP at the time of entry into the previous IMF program that became effective in September 2013.
"There will be borrowings
of Rs 11,000 crore per week till the beginning of November, following which the borrowing
per week will be Rs 12,000 crore, like in the first half of the year.
"Our monetary opinion covers the proposed foreign borrowings
' impact on domestic liquidity, balance of payments, etc.," said Guinigundo.
As the loan would also serve the purpose of debt servicing, it would on the other hand add more to Pakistan's borrowing
and the debts incurred as a result.
The government has budgeted gross and net market borrowings
at Rs 5.8 lakh crore and Rs 4.23 lakh crore, respectively in 2017-18.
Thus, the simplified procedure will ensure that consent under Article 293(3) is issued only on three occasions during the year, one in the month of April for first nine months after fixation of borrowing
ceilings, second in the month of December for the first two months of the fourth quarter and last in the month of March after the assessment of actual borrowings
by the States.
M2 EQUITYBITES-April 12, 2016-Bill Barrett updates borrowing
base redetermination under revolving credit facility