ISLAMABAD, Dec 1: Pakistan debt regime has posted an impressive decline worth Rs19.7 billion in fiscal 2000-2001 for the first time against 1999-2000.

Rs27.5 billion fall in domestic interest payments provided cushion in debt payments, and the plummet is attributed to lower interest payments on permanent debt, while an additional impetus came from reduced interest expense on floating and unfunded debts, officials sources said here on Saturday.

The lower interest payments on permanent debt were the result of reduced returns (prizes) on the National Prize Bonds scheme, and a lower interest payment on SLIC bonds due to continuing maturities.

Average interest rate on each category of domestic debt has witnessed a significant plunge in fiscal year 2001 over last year, which indicates that government borrowing from the banking system is the cheapest, while permanent debt is the most expensive, closely followed by unfunded debt.

Declining average interest rates also reflect lower interest payments on domestic debt in FY01 and, more specifically, interest payments on floating debt registered a decline by Rs4 billion in FY01 compared to the preceding year.—APP