Government required to retire over Rs 100 billion SBP dues this month: Tarin

[Naveed Yaseen]

RIZWAN BHATTI
KARACHI (March 26 2009): The federal government has to retire over Rs 100 billion of budgetary borrowing to the State Bank of Pakistan (SBP) by the end of this month, to comply with the International Monetary Funds (IMF) one of the primary conditions of limited borrowing. Advisor to PM on Finance Shaukat Tarin said he was confident that the government would meet all IMF targets for the third quarter, before time.

"We will achieve the IMF target of limited borrowing from the central bank with the help of millions of dollars foreign inflows, expected this month, and revenue receipts," he said. He said that the Pakistan had already met the target of the second quarter and, at present, the country is not facing any hurdles in reaching the current targets.

The IMF has set several targets for Pakistan for continuous payment of 7.6 billion dollars standby loan tranches and, as per the IMF targets, the country has to meet the limited government budgetary borrowing condition every quarter.

The IMF has asked Pakistan to curtail net government borrowing from State Bank of Pakistan (SBP) and overall stock of governments budgetary borrowing from SBP should not be more than Rs 1,274 billion by the end of March. SBP latest statistics showed that stocks of governments budgetary borrowing from SBP were constantly on the rise and largely higher than the IMF target.

The governments budgetary borrowing from central bank stood at Rs 1382.148 billion as on March 7, 2009 against the IMF target of Rs 1,274 billion by the end of March 2009. Therefore, to meet the IMF target, the federal government is compelled to retire over Rs 108 billion during this month. Otherwise, it may face some difficulties in receiving next tranche of IMF standby loan. The federal government is constantly taking huge borrowing from the banking system including the State Bank of Pakistan (SBP) and other banks for last two years to meet its budgetary deficit.

The federal government has borrowed Rs 411.496 billion from banking sector for budgetary support from July 1 to March 7, 2009, out of which some Rs 348 billion was borrowed from SBP and some Rs 63 billion from banks. Tarin said that the federal government also had already retired some amount and the remaining would be retire in the next few days to achieve the IMF target. He said that now the country is in a healthy financial position and there are no threats to the economy.

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