The Government of Pakistan is planning to borrow another 15 Billion during the next financial year, out of which 10 Billion will be used to repay old loans while the remaining amount will be used to keep the country's foreign exchange reserves.
Sources in the finance ministry said that if the government manages to manage the 15 billion debts, it will be the largest loan in any financial year in the country's history and the country will be burdened with more debt. Government has failed miserably to increase its exports, increase remittances, and bring in foreign direct investment to get out of debt.
At present, the 12 billion in foreign exchange reserves held by the State Bank of Pakistan are all in demand. This is the same situation as it was during the PML-N era. In its April report, the IMF set the SBP's foreign exchange reserve limit at 15.6 for the fiscal year 2020-21, which it finds difficult to obtain without further borrowing, as domestic exports have risen marginally and Pakistanis abroad Remittances seem to be declining slightly.
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