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Govt can no longer borrow from state bank, a sad day.

newb3e

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We have sucessfully printed money on election years in last 40 years..inflation is next govt headache not the current
For example govt printed notes heavily in 2017-2018 but inflation became an issue in 2019-2020
i like your sense of humor!
 

Verve

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he will tell you how SBP has stopped lending to govt, but he wont mention the fact the govt borrowing from local comm banks is at an ATH .
If you had studied economics, you would have understood the difference between 'Printing Money' and 'Borrowing'.
 

ziaulislam

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If you had studied economics, you would have understood the difference between 'Printing Money' and 'Borrowing'.
State bank lending is cute name for printing money
While lending from other banks is not sexy its just plain lending

This is so simple that my pakistani school
Teacher explained it to us in class 8 while teaching how money works. Its not that complicated.

It has nothing to do with studying economy

borrowing from local lenders is at an all time high

not sure where you get your facts from


KARACHI:
The Pakistan Tehreek-e-Insaf (PTI) government has planned to raise debt worth Rs5.87 trillion by offering sovereign securities to commercial banks over the next three months, according to the central bank.

The funds to be raised through the issuance of treasury bills (T-bills) and Pakistan Investment Bonds (PIBs) would be partially utilised to pay off the maturing debt of Rs5.15 trillion. However, they will also add a net Rs720 billion to the public debt portfolio in the three months from October to December 2021.

The planned borrowing will be expensive in the wake of an uptick of 25 basis points in the benchmark policy rate of the central bank in September 2021 and will increase the debt burden on the nation.

“An increase of one percentage point in the benchmark interest rate increases interest payment (debt servicing) by Rs180 billion,” Economist Dr Ashfaque Hasan Khan said.

Besides, Rs1.8 trillion had been added to the foreign debt component of the total public debt because of rupee depreciation over the past five months, said Khan, who is also the Dean and Professor at National University of Sciences and Technology (NUST).

The rupee has depreciated by Rs18.53 from the 22-month peak of Rs152.28 touched in May 2021. The local currency closed at Rs170.8 against the greenback on Tuesday.

The breakdown of the planned fresh borrowing suggests that the government will borrow Rs5.05 trillion by issuing three to 12-month T-bills against maturing papers of Rs5.1 trillion from October to December 2021.

Similarly, it will raise Rs300 billion by floating three to 30-year PIBs (at a fixed rate of return) against the maturity of previously issued bonds worth Rs55 billion during the three months.

Govt to borrow Rs4.8tr from commercial banks

It will borrow an additional Rs225 billion through the issuance of three to five-year PIBs at a floating (variable) interest rate against zero maturity as the floating rate bonds are relatively new.

“The issuance of government debt securities at a floating rate is aimed at reducing the cost of borrowing,” Pak-Kuwait Investment Company Head of Research Samiullah Tariq said the other day.

The government is also gradually replacing its short-term debt (T-bills) with long-term borrowing (PIBs).

“This measure is aimed at making the debt profile sustainable, getting enough time to implement economic reforms and overcoming the challenge of increasing tax collection by the time long-term papers of up to 30 years reach maturity,” he said.

The government will utilise the net new debt of Rs720 billion to finance its budget expenditure including development projects like roads and dams under the Public Sector Development Programme (PSDP).

It will also partially finance its defence requirements and issue funds to different ministries in the form of debt.

The government will finance its expenditures through the debt because tax revenue collection has remained low compared to the immediate requirement for funds for the ongoing fiscal year 2021-22.

The government has set the economic growth target at 4.8% for the current fiscal year. It has announced a budget of Rs8.5 trillion for the purpose.

The outlay is supposed to be financed through the targeted revenue collection of Rs5.82 trillion and borrowing worth Rs3.42 trillion.

The government has set the fiscal deficit target at Rs3.42 trillion (or 6.3% of GDP) for the current fiscal year against 7% last year.

It aims to collect 17.4% higher tax revenue through the Federal Board of Revenue (FBR) to Rs5.82 trillion in FY22 compared to Rs4.96 trillion in FY21.

Published in The Express Tribune, October 6th, 2021.




this OP deliberately misleads the audience by off topic discourse and half truths

he will tell you how SBP has stopped lending to govt, but he wont mention the fact the govt borrowing from local comm banks is at an ATH .

( not to mention the circular debt of 2300bn )
How on earth did you manage to admit that?

The Shaikh Chillis had been saying the opposite for the last-three years.

Crazy. Delete your post.
Sir my leader caused a huge boom/growth of 5.2% during 2017-2018 on back of massive spending due to state bank lending..indeed a great acheivement of main sahab(love you).

Who says otherwise..now if sbp lending(printing) causes inflation and negative growth next yr(due to devaluation/higher spending/imports) then thats not our headache thats all IK fault/incompetence
My yadgar picture welcoming nawaz sharif return you can see my blurry face here...great times 😍 😍
1628242978_nawaz-sharif.png
 
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ziaulislam

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Bro there is a big difference between borrowing from local commercial banks and SBP. What happened in the past is this injection was balanced off by subsidizized dollar to contain inflation compounding our BoP situation. This SBP autonomy is an absolute must for sustainable growth so we don't end up with the same cycle of repeated boom (artificial growth) and bust (correction phase).

Fisical deficit needs to be financed that's why government borrows. Our deficit is not due to government spending ( primary deficit) but due to debt and interest payments. ( Primary deficit + debt obligations = fiscal deficit).

You and I both know what has caused the circular debt to spiral out of control. Unless we adjust capacity payments completely in tariff circular debt will rise ( this is the main reason why IMF is demanding increase in electricity tariff). Our recovery head at Disco level is at 97% a huge increase , our T&D losses are grossly unchanged ( marginally decreased as well). On the other hand our capacity payments have swelled to trillion rupees a year due to coming online of 2015 IPP's. Government has contained this Capacity payment increase to ~ 400-500b range ( same level as plmn years when capacity payments were just 400b per year) by tariff increase and increasing collection under recovery head and marginal reduction of T&D losses ( T&D losses are built into tariff for decades).
Remember PPP left circular debt at just 200b per year vs now projected 1.4 trillion in 2023 due to IPP's under 2015 policy.
Inshallah due to my quaid great leadership in intiating land acquistion for bhasha dam in 2013 and clearing dasu, munda dam construction in 2013 we will solve our problems in 2028 when nawaz sharif is back in power.. Well it may be 2035 but the cheap 12000mw hydro will help
PS
sorry for my PPPP brothers
Bhasha dam credit goes to PPPP PM (i forgot his name) and our dear father zardari sahab(aik zardari sab per bhari) Who inaugrated it in 2009.

Picture of inaugration of bhasha dam in 2010 with plan completeion in 2018
images (1).jpeg

in USA US mint is responsible for printing money, it has a deposit account in federal reserve. So one idea to pay US debt 26.7 trillion dollar is to create a 1 trillion dollar coin and submit it in Federal reserve.

The system is rigged!

Usa is super power who offers debt in dollars
Its leader in technology and if its hand is forced it will simply print all the money to pay it debt

Guess what because its the leader in technology noone can do shit about it

Even today elon musk, pichai, nadella are all americans despite being born elsewhere

No other country has done this in history expcet for may be mughals

Hence USA decline will only happen if it changes its attitude from within

As its talent sucking machine
 
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Patriot forever

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Inshallah due to my quaid great leadership in intiating land acquistion for bhasha dam in 2013 and clearing dasu, munda dam construction in 2013 we will solve our problems in 2028 when nawaz sharif is back in power.. Well it may be 2035 but the cheap 12000mw hydro will help
PS
sorry for my PPPP brothers
Bhasha dam credit goes to PPPP PM (i forgot his name) and our dear father zardari sahab(aik zardari sab per bhari) Who inaugrated it in 2009.
They are too high to understand sarcasm. 😂
 

Flight of falcon

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borrowing from local lenders is at an all time high

not sure where you get your facts from


KARACHI:
The Pakistan Tehreek-e-Insaf (PTI) government has planned to raise debt worth Rs5.87 trillion by offering sovereign securities to commercial banks over the next three months, according to the central bank.

The funds to be raised through the issuance of treasury bills (T-bills) and Pakistan Investment Bonds (PIBs) would be partially utilised to pay off the maturing debt of Rs5.15 trillion. However, they will also add a net Rs720 billion to the public debt portfolio in the three months from October to December 2021.

The planned borrowing will be expensive in the wake of an uptick of 25 basis points in the benchmark policy rate of the central bank in September 2021 and will increase the debt burden on the nation.

“An increase of one percentage point in the benchmark interest rate increases interest payment (debt servicing) by Rs180 billion,” Economist Dr Ashfaque Hasan Khan said.

Besides, Rs1.8 trillion had been added to the foreign debt component of the total public debt because of rupee depreciation over the past five months, said Khan, who is also the Dean and Professor at National University of Sciences and Technology (NUST).

The rupee has depreciated by Rs18.53 from the 22-month peak of Rs152.28 touched in May 2021. The local currency closed at Rs170.8 against the greenback on Tuesday.

The breakdown of the planned fresh borrowing suggests that the government will borrow Rs5.05 trillion by issuing three to 12-month T-bills against maturing papers of Rs5.1 trillion from October to December 2021.

Similarly, it will raise Rs300 billion by floating three to 30-year PIBs (at a fixed rate of return) against the maturity of previously issued bonds worth Rs55 billion during the three months.

Govt to borrow Rs4.8tr from commercial banks

It will borrow an additional Rs225 billion through the issuance of three to five-year PIBs at a floating (variable) interest rate against zero maturity as the floating rate bonds are relatively new.

“The issuance of government debt securities at a floating rate is aimed at reducing the cost of borrowing,” Pak-Kuwait Investment Company Head of Research Samiullah Tariq said the other day.

The government is also gradually replacing its short-term debt (T-bills) with long-term borrowing (PIBs).

“This measure is aimed at making the debt profile sustainable, getting enough time to implement economic reforms and overcoming the challenge of increasing tax collection by the time long-term papers of up to 30 years reach maturity,” he said.

The government will utilise the net new debt of Rs720 billion to finance its budget expenditure including development projects like roads and dams under the Public Sector Development Programme (PSDP).

It will also partially finance its defence requirements and issue funds to different ministries in the form of debt.

The government will finance its expenditures through the debt because tax revenue collection has remained low compared to the immediate requirement for funds for the ongoing fiscal year 2021-22.

The government has set the economic growth target at 4.8% for the current fiscal year. It has announced a budget of Rs8.5 trillion for the purpose.

The outlay is supposed to be financed through the targeted revenue collection of Rs5.82 trillion and borrowing worth Rs3.42 trillion.

The government has set the fiscal deficit target at Rs3.42 trillion (or 6.3% of GDP) for the current fiscal year against 7% last year.

It aims to collect 17.4% higher tax revenue through the Federal Board of Revenue (FBR) to Rs5.82 trillion in FY22 compared to Rs4.96 trillion in FY21.

Published in The Express Tribune, October 6th, 2021.




this OP deliberately misleads the audience by off topic discourse and half truths

he will tell you how SBP has stopped lending to govt, but he wont mention the fact the govt borrowing from local comm banks is at an ATH .

( not to mention the circular debt of 2300bn )
Please please tell me you know the difference between BORROWING from the local banks through T bills etc and simply printing money through state bank………

.
Please before you try to be Ishaq Dar at least read your grade five economics book.
 

ziaulislam

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Please please tell me you know the difference between BORROWING from the local banks through T bills etc and simply printing money through state bank………

.
Please before you try to be Ishaq Dar at least read your grade five economics book.
Sir dont be hard on him.
there is no difference in rupees/money you get to spend
In both cases current value of the rupee is same
I.e 100 rupee via sbp is same in value of 100 rs via local bank lending..

I mean
کل کا کل دیکھا جاے گا
 

mourning sage

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The title tells me how little the OP knows about any macro economics...

Patwaris need to be named and shamed honestly.
 

Blacklight

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I swear this is by far the dumbest and stupidest thread on the forum right now.

free money ? Seriously ever heard of printing money causes inflation.

this is what happens when one goes to the schoolOf Patwaris where keeping dollar at Rs 90 is more important than saving economy…..

Just plain out stupid discussion .
Zia Sahab is anti-noora, and a die hard PTI supporter, he is on a sarcasm trip nowadays, ever since his recent trip to Pakistan.
 

Pakistan Space Agency

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... Sir my leader caused a huge boom/growth of 5.2% during 2017-2018 ...
Thank you for admitting it again.

At least you guys have stopped saying that the 5.2% GDP Growth Rate was fake or that the PSX reaching record high of 52,876.46 points was also manipulated.

Slowly but surely you guys will get educated enough and learn Pakistan cannot be forcibly converted into Scandanavia.
 

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