Domestic debt surges by 19.04pc in 11 months

Source : The News

Friday, June 25, 2010

External financing key reason for sharp rise: SBP

KARACHI: Pakistan’s outstanding stock of domestic debt rose by 19.04 per cent to Rs4.633 trillion by May from Rs3.892 trillion during the corresponding period last year, the central bank said on Thursday.

The rise in domestic debt is attributed to the net external financing due to lower-than-expected disbursement of the pledged foreign financing and increase in the external debt repayment on maturing stocks of the foreign currency bonds, the State Bank of Pakistan (SBP) said.

In a recently released report the SBP had said that a slightly higher than the projected fiscal deficit and the virtual halt with the budgeted external finances put pressure on the domestic source of financing to finance the budget deficit.

“Consequently, the structure of domestic debt changed significantly with increasing share of scheduled banks and non-bank debt in the total domestic debt,” it said.

The outstanding stocks of permanent debt went up by 16.79 per cent to Rs789 billion during July-May 2009/10 against Rs675.6 billion during the corresponding period last year.

Pakistan Investment Bonds (PIBs) retained its dominant share in the outstanding stocks of permanent debt with Rs505.3 billion against Rs441 billion.
The head of floating debt rose by 22.66 per cent during the first 11 months of FY10 to Rs2.397 trillion against 1.954 trillion during the corresponding period last year, the central bank said.

The unfunded debt showed an increase of 14.89 per cent to reach Rs1.44 trillion against Rs1.253 trillion. The outstanding stocks against major National Savings Scheme (NSS) instruments recorded a positive growth except for Defence Savings Certificate, which dipped to Rs223 billion against Rs259.8 billion, it added.