The Government is likely to settle the mounting circular debt through issuance of bonds with maturity of three to five years, an official close to the finance ministry and banking industry is reported to have said.
In the recent past, after the incumbent government assumed office in 2013, the government decided to issue investment bonds worth Rs 480 billion to settle the circular debt that stood at Rs 503b .Some of these bonds are maturing in June this year, with circular debt once again escalating to Rs 400 billion.
The industry sources are reported to have said that though the exact amount has not been specified but the government is likely to issue Pakistan Investment Bonds in excess of Rs 340b.
Officials at the Independent Power Plants are reported to have said that the circular debt has peaked to Rs 414b, and the companies experiencing a liquidity crunch have reduced buying furnace oil from oil marketing companies despite ample stocks. On the other hand, the government claims that circular debt stands at around Rs 385b.
The decision regarding the issuance of bonds is expected anytime soon.
