Business

Govt to borrow record Rs11.1 trillion in FY24 first quarter

Published

1 year ago

Farwa

Govt to raise Rs8.70 trillion via short-term paper auctions.
PIBs to allow govt to borrow Rs1.68 tn from commercial banks.
Markup expenses budgeted at Rs7.3 trillion for FY24.

KARACHI: As the government grapples with a ballooning budget deficit and a sluggish economy, the central bank’s auction calendar shows it plans to borrow a record Rs11.1 trillion rupees through treasury bills and bonds in the July-September quarter, The News reported Friday.

Most planned borrowing for the first quarter of FY24 will be done through Market Treasury Bills with maturities of three, six, and 12 months.

According to the auction calendar issued by the central bank on Thursday, the government will raise Rs8.70 trillion via short-term paper auctions.

The sale of Pakistan Investment Bonds (PIBs) with fixed and floating rates will allow the government to borrow Rs1.68 trillion from commercial banks.

It will borrow Rs450 billion via variable rental rate and Rs270 billion via fixed rate government of Pakistan Ijara Sukuk.

During July-September FY24, T-bills and PIBs worth Rs9.6 trillion will mature.

According to the Ministry of Finance, the federal budget deficit increased by more than Rs3.5 trillion in the first nine months of the current fiscal year due to a sharp increase in spending on debt servicing and defence requirements, which accounted for two-thirds of all expenditures.

Markup expenses have been budgeted at Rs7.3 trillion for FY24, up 85% from a year earlier.

Markup expenses are expected to grow on the back of higher interest rates that have been increased to tame inflation, along with higher borrowings by the government to plug fiscal deficit.

Due to the government’s expanding demand for funding, public debt is accumulating more quickly, and the stalled International Monetary Fund (IMF) Extended Fund Facility (EEF) — which expired on June 30 — dried foreign currency inflows.

Moreover, given poor revenue and high expenditure demands, the government was forced to increase its domestic debt.

The federal government’s debt increased 32% year-on-year to Rs58.962 trillion at the end of May.

At the end of May, the domestic debt surged by 28% year-on-year to Rs37.1 trillion.

Domestic debt rose by 19.2% during the 11 months of FY2023.

Similarly, foreign debt increased sharply by 40% to Rs21.9 trillion in May, while it grew by 31% in FY2023.

Last week, the government reached a staff-level agreement with the IMF for a $3 billion standby arrangement.

The eight-month delay in the agreement, awaiting IMF board approval in July, gives Pakistan some relief as it struggles with a severe balance of payments crisis and declining foreign exchange reserves.

The IMF agreement has reduced the nation’s risk of a short-term default.

Business

With its second-largest surge ever, PSX approaches 114,000 points.

Published

2 days ago

Farwa

Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

Business

In interbank trade, the Pakistani rupee beats the US dollar.

Published

1 week ago

Farwa

In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

Business

Phase II of CPEC: China-Pakistan Partnership Enters a New Era

Published

1 week ago

Farwa

The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.