Credit to private sector slows down
Banks continue to focus on investment in govt debt securities
KARACHI:
Bank credit to the private sector for setting up new industrial units has continued to slow down as financial institutions have partially deviated from their principal objective of supporting industrialisation and shifted their focus to more investment in risk-free government debt securities like T-bills and Pakistan Investment Bonds (PIBs).
Banks’ strategy to remain in profit through maximum investment in government debt securities rather than taking calculated risks to finance new business ideas has hurt industrialisation, which is a good source of providing job opportunities in the country. Advances to the private sector grew 4% to Rs8.59 trillion by the end of March 2021 compared to Rs8.26 trillion in the same month of previous year, according to the central bank and Topline Research.
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National
April 11, 2021
ISLAMABAD: In the wake of the rising burden of public debt that had ballooned to almost 93 percent of GDP, the PTI government has committed to the IMF for tabling amendments into Fiscal Responsibility and Debt Limitation Act (FRDLA) 2005 before the Parliament by June 2021.
The amendments into FRDLA is aimed at strengthening the Debt Management Office (DMO) working under the Ministry of Finance. According to the IMF staff report compiled after approval of second to fifth reviews under $6 billion Extended Fund Facility, (EFF) the government agreed to establish a debt management office to strengthen its debt management strategy.
In line with World Bank and IMF recommendations, Pakistan told the IMF that they have established the proper rules of business, describing the activities and organization of the DMO, as they are amending the Fiscal Responsibility and Debt Limitation Act (2005). The draft bill for requisite amendments are expected to be submitted to t
The State Bank reported that bids for T-bills were Rs2.124 trillion but the government remained close to its target of Rs900bn. AFP/File
KARACHI: The government raised over Rs869 billion through the treasury bills (T-bills) auction on Wednesday, though a meagre amount for the long-term Pakistan Investment Bonds (PIBs) was raised against the target.
The State Bank reported that bids for T-bills were Rs2.124 trillion but the government remained close to its target of Rs900bn. The highest amount raised was for the benchmark six-month T-bills while bids for 12-month papers were rejected.
The cut-off yields on three-month papers were slightly changed, not reflecting any major change in the coming weeks.
Business
April 6, 2021
KARACHI: Pakistan’s public debt increased by Rs1.505 trillion or 4.28 percent in the eight months of this fiscal year amid increase in government borrowing to plug budget deficit gap.
The public debt stood at Rs36.612 trillion at the end of February 2021, compared to Rs33.417 trillion at the end of February last year. The debt stood at Rs35.107 trillion in the period ended June 2020, according to the central bank’s data released on Monday.
It rose big time on the government’s domestic borrowing side, rising 6.43 percent to Rs24.780 trillion, while the government foreign debt increased only 0.06 percent to Rs11.832 trillion at the end of February 2021.