*ISLAMABAD: The Ministry of Finance here on Thursday clarified that therehad been no fresh borrowings by the government from the State Bank ofPakistan (SBP).*
“In fact the government has been retiring its previous stock of debt withthe SBP on its maturity,” the ministry said in a statement while respondingto news circulating on social media whereby an impression was being createdthat government had borrowed from the central bank.
The statement termed it grossly incorrect which depicted the limitedunderstanding of the monetary variables.
It said, as reported in the monetary tables (M2), the government’sborrowing from the SBP for budgetary purposes was calculated as thedifference between the government’s stock of borrowing from the SBP and itsdeposits with the central bank.
Read Top Stories
Therefore, net borrowing number may change due to fluctuation in cashbalance with SBP and other accounting conventions, it said adding thischange was not fresh budgetary borrowing by the government from SBP butjust a change in government’s cash balance with the SBP.
The ministry said, the government remained committed to complying with itsobligations under the amended SBP Act and IMF program conditions.
