ISLAMABAD: The Ministry of Finance has disclosed the comprehensive breakdown of domestic loans acquired by the interim government spanning from August 17, 2023, to January 31, 2024, shedding light on the financial landscape during this transitional phase.
During the caretaker regime, the government procured domestic loans amounting to a staggering sum of Rs 19,830 billion, whereas from February 1 to August 16, 2023, loans totalling Rs 19,862 billion were borrowed, marking a notable financial activity.
However, the interim government demonstrated fiscal responsibility by repaying a substantial portion of the local debt, returning Rs 17,934 billion during its tenure compared to Rs 14,031 billion in the prior period.
Remarkably, the net flow of local debt during the caretaker term stood at Rs 1896 billion, showcasing a significant decline from the previous period’s Rs 5,831 billion, denoting a 67% reduction in loans compared to the corresponding timeframe.
Moreover, the Ministry highlighted that the caretaker administration inherited a policy rate of 22%, whereas the average policy rate in the preceding term was 19.5%, indicating the financial landscape’s dynamics.
In a bid to streamline the local debt profile, the caretaker government executed measures to enhance financial stability. Notably, the volume of treasury bills escalated to Rs 1.6 trillion during the caretaker period, a noteworthy decrease from the previous term’s Rs 3.3 trillion, consequently alleviating the government’s fiscal burden.
Furthermore, the statement outlined the external debt situation, disclosing that the caretaker government secured external loans amounting to $3.9 billion, significantly lower than the $8.4 billion borrowed in the prior term.
Equally significant was the repayment of foreign debt, with the interim government successfully clearing $3.6 billion, compared to $5.4 billion in the previous period, showcasing prudent financial management during the transitional phase.
