ISLAMABAD: National Assembly Standing Committee on Finance, Friday demanded details regarding State Bank of Pakistan’s short-term borrowing of $6.2 billion.
This comes amidst worries the central bank may consider freezing foreign currency accounts due to deteriorating foreign exchange reserves, reported Express Tribune.
The Ministry of Finance has been instructed by parliamentary panel to provide details about these short-term loans taken by SBP. The standing committee on Finance was apprised about the loans disbursed and repayment related obligations in last 4.5 years by Economic Affairs Division (EAD), Secretary Arif Khan.
Parliamentary panel was also made aware of loan taken under CPEC has been assigned as $2.1 billion as debt and over $25.11 million interest had already been paid on it.
According to EAD Secretary’s opinion, SBP’s borrowing of over $6 billion under currency swap arrangements were part of $7.5 billion foreign commercial loans obtained by the incumbent government in the last 4.5 years.
And these currency swap loans are not actually a part of foreign commercial borrowings. Till November 2017, SBP obtained $6.16 billion from commercial banks under currency and forward swap arrangements as per its data.
Pakistan Tehreek-e-Insaaf MNA Asad Umar cautioned about potential danger of freezing foreign currency accounts by SBP because of rising external financing gap due to higher than expected current account deficit and increasing repayments of foreign loans.
Umar highlighted about the danger posed by $15-$16 billion financing deficit and $6 billon of currency swap arrangements by SBP, may force the central bank to freeze foreign currency accounts.
He added foreign exchange reserves were on the decline even after successful issuance of $2.5 billion bond out of which over $1 billion had already been used up.
EAD Secretary told the parliamentary panel, Pakistan obtained at least $ 36.80 billion as foreign loans during the past five years and the government has received $ 7.20 billion loans from commercial banks
Under the chairmanship of MNA Qaiser Ahmad Sheikh, Arif Ahmed Khan briefed the committee about overall debt and said that the government has received $ 5.80 billion from World Bank in the past five years, while it has obtained $ 4.40 billion from Asian Development Bank in the same period. The government has also issued bonds worth $ 4.53 billion during the past five years.
The committee, however, showed extreme displeasure on the absence of the finance minister, finance secretary and finance advisor.
