Government proposes adjusting public debt legislation
The Finance Ministry recently issued a press release, indicating that the government will ask parliament to adjust the Public Debt Act so that the debt ceiling can be raised. The government explained that raising the debt ceiling is necessary because the debt in local currency or SRDs has gone up as a result of the rising exchange rates while the gross national product (GNP) due to the negative growth. The current debt ceiling for the public debts of 60% of the GNP is getting close to the edge of a cliff which means that the opportunities for implementing a healthy debt policy are also near the ‘danger zone.’
The government reportedly has suggested raising the entire debt ceiling to 80% of the GNP. The debt ceiling for internal debt will also be raised from 25% to 30% and the debt ceiling for foreign debt will be raised from 35% to 50%. This increase will reportedly be temporary.