KARACHI: The government’s borrowing from the scheduled banks jumped by 99 per cent within a week ended on Sept 13, reported State Bank on Monday.

During the week from Sept 6 to Sept 13, the government’s borrowings increased by Rs443.5 billion to Rs899bn. This is almost equal to the amount it borrowed (Rs455.8bn) since July 1 to Sept 6.

The State Bank’s report indicates that the government borrowed aggressively during the week and added about Rs443.5bn in its debts from the scheduled banks.

The aggressive borrowing began in mid July when the State Bank completed its cycle of monetary tightening and raised the key discount rate by one percentage point. Government debt auctions had remained lacklustre for almost a year and a half until then.

This year the borrowing situation has changed compared to last year which emerged out of the IMF agreement. The government borrowing from scheduled banks and retiring SBP debts since the start of the current fiscal year.

During the same period of last fiscal year, the government had retired Rs1,238bn of the scheduled banks but this year the government has so far retired Rs625bn of the State Bank.

The private sector retired Rs115.7bn till Sept 13 which was Rs86bn till Sept 6. However, last year the private sector had borrowed Rs16.5bn during the same period.

Published in Dawn, September 24th, 2019