ISLAMABAD - Pakistan’s borrowing from foreign commercial banks is continuously increasing as the government had borrowed $1.799 billion from these banks in six months (July to December) of the current fiscal year.
The government had borrowed around 90 percent of the annual borrowing from commercial banks in just six months period to repay previous loans and maintain the foreign exchange reserves of the country.
The federal government had budgeted to borrow $2 billion foreign commercial loans during ongoing financial year 2019-20.
Meanwhile, borrowing from the commercial banks had shown an increase of 260 percent, as the government borrowed $1.799 billion from foreign commercial banks in the first half of the current fiscal year compared to $499.44 million during the same period of last year.
According to the data of ministry of Economic Affairs government had taken $749.50 million from foreign commercial banks during the month of December 2019, including $700 million from China Development Bank and $49.50 million from Dubai Bank.
Dubai Bank disbursed $197.99 million and Ajman Bank $66.69 million in November.
The country received $88.92 million from Ajman Bank and $155 million from the consortium-led by Suisse AG, UBL and ABL in October.
Dubai Bank had also disbursed $193.05 million in September. Citibank disbursed $148.2 million in August.
The country also borrowed $123.31 million from Dubai Bank and $50 million from a consortium of Credit Suisse in July.
It is worth mentioning here that Pakistan had secured $5.78 billion from external sources including multilateral, bilateral and banking sources in six months (July to December) of the current fiscal year.
However, the Ministry of Finance claimed that government had taken the loan to repay previous loans and interest payment. The government had paid back $3.8 billion during July-December period.
The Ministry of Finance further maintained that the government recorded net inflows in multilateral and bilateral debt while there was a net retirement of commercial loans / Eurobonds during July-Dec 2019, depicting enhanced debt sustainability.
