KARACHI, March 21: Pakistan’s debt servicing cost is estimated to have reduced by Rs9.1 billion in the current fiscal year mainly because of appreciation of rupee exchange value against dollar.

An appreciation in rupee exchange value to around Rs 60 a dollar from Rs 64.5 a dollar since October last year after the collapse of hundi and hawala has brought down Pakistan’s debt servicing cost in rupee terms to Rs 121.7 billion from budgeted amount of Rs 130.8 billion.

“The saving of Rs9.1 billion is still an under estimate,” observes the State Bank of Pakistan’s second quarterly report released on Wednesday. This report reviews Pakistan’s economic performance during October-December 2001 period, which incidentally is a turning point when dollar inflow swelled but with no indication of any improvement in exports, domestic production and local revenue generation.

The SBP report estimates Rs3.39 billion saving in debt servicing during October-December 2001 quarter, Rs3.03 billion saving in third quarter (January-March 2002) and Rs 2.70 billion saving in the last quarter of April to June 2002. This saving is estimated on the assumption that dollar-rupee parity will remain around Rs 60 a dollar in the remaining period of the fiscal 01- 02.

Appreciation in rupee value has brought down Pakistan’s debt servicing in second quarter to Rs45.30 billion against original estimate of Rs48.70 billion. It is expected that debt servicing in the current quarter (January to March) will come down to Rs40.44 billion from Rs43.47 billion and to Rs35.94 billion from Rs38.63 billion in the last quarter.

Pakistan’s total external liabilities are 38.01 billion dollars plus 1.06 billion dollars liabilities payable in Pakistan rupees. The SBP report puts Pakistan’s total external debt stock at 32.98 billion dollars. This include 28.56 billion dollars medium and long term liabilities. The private non-guaranteed debt amounts to 2.25 billion dollars while IMF borrowing is 1.87 billion dollars.

Other foreign exchange liabilities are 5.02 billion dollars including the deposits in foreign currency accounts, special US dollar bonds, NHA bonds, central bank deposits from Gulf countries, NBP and BOC deposits, swaps and deposits under NDRP. According to SBP report these liabilities are different from external debt in the sense that payments are not structured by any set schedule. It is not generally solicited and is primarily held by the residents.