ISLAMABAD: Economic Affairs Minister Hammad Azhar on Thursday informed the National Assembly that the government would return over $10 billion foreign debt during the current fiscal year (FY20).
Replying to various supplementary questions, the minister said the incumbent government returned $8.39 billion foreign debt from August 18, 2018, to June 30, 2019, adding that the government had obtained $7.1 billion foreign in loans during the said period.
He said the previous government (PML-N), during the last two years of its tenure, had obtained short-term loans, which needed to be returned. “Foreign debt as on August 18, 2018, was $73.1 billion.”
To another question, Azhar claimed that the debt to GDP ratio had exceeded the limit during PML-N’s tenure. However, he said that the incumbent government was making consorted efforts to bring it down to the prescribed limit.
“The government has cleared record number of refund cases worth Rs145 billion,” he maintained.
The minister said in order to resolve the current economic woes, the government was introducing a comprehensive set of economic and structural reforms with a particular focus on export enhancement, fiscal stability and governance of state-owned enterprises.
Regarding the devaluation of rupee, Azhar said that the recent movement in the exchange rate reflected the resolution of macroeconomic imbalances accumulated over the past few years when the rupee was kept overvalued.
“The increased demand for imported goods led to the widening of the current account deficit to unmanageable levels, putting severe pressure on the country’s foreign exchange reserves,” he explained. “As a result of the demand-supply gap in the foreign exchange market, the value of rupee depreciated by 13.7pc in FY18 and 24.1pc in FY19.”
He said Pakistan’s current exchange rate regime was flexible and market-determined, adding that the State Bank of Pakistan was committed to addressing the disorderly market behaviour.