KARACHI: The government borrowed Rs215.3 billion through the auction of Pakistan Investment Bonds (PIBs) on Wednesday.

Raising more than double the Rs100bn target reflects its greater dependence on the banking money which was against the trend exhibited in the beginning of this fiscal year.

From the outset of this fiscal year the government started borrowing from the State Bank of Pakistan (SBP) while the commercial banks noticed debt retirement.

However, the scenario has started changing as the borrowing spikes, exceeding the targets set by the government.

For the last two years the government had been borrowing from the scheduled banks while it retired the debts of the SBP.

The borrowing from the central bank till August 12 reached Rs737bn against a net debt retirement

of Rs160bn during the same period of last fiscal year. The vital change in the borrowing trend was seen as the outcome of the government’s leaving the IMF.

The auction results showed that the government borrowed Rs100.7bn for three years, Rs64bn for 5 years and Rs50bn for 10 years; no bids were received for 20-year papers.

The bids offered amounted to Rs338bn indicating that the banks have not changed their strategy to park their maximum liquidity in the government papers.

The State Bank reported that the government has been retiring the debts of the scheduled banks and the amount of debts retired so far rose to Rs527bn against the net borrowing of Rs307.5bn during the same period of last fiscal year.

During the two months of June and July the maturity of PIBs were collectively about Rs1.2 trillion which created a big gap to be filled by the government and the government started borrowing more than the targets form the banks, said an analyst.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Provincial share
Updated 17 Mar, 2024

Provincial share

PPP has aptly advised Centre to worry about improving its tax collection rather than eying provinces’ share of tax revenues.
X-communication
17 Mar, 2024

X-communication

IT has now been a month since Pakistani authorities decided that the country must be cut off from one of the...
Stateless humanity
17 Mar, 2024

Stateless humanity

THE endless hostility between India and Pakistan has reduced prisoners to mere statistics. Although the two ...
Moving away
Updated 16 Mar, 2024

Moving away

The sole objective of the government’s development vision should be to evolve sound policies for private investors and regulate markets to protect consumers.
Privacy in danger
16 Mar, 2024

Privacy in danger

DURING a recent Islamabad High Court hearing, revelations about the ease of mobile phone hacking in Pakistan have...
The polio problem
16 Mar, 2024

The polio problem

IT is a tragedy that could have been prevented. Six months after researchers at the National Institute of Health’s...