No fresh borrowings from SBP, clarifies finance ministry

The Ministry of Finance here on Thursday clarified that there had been no fresh borrowings by the government from the State Bank of Pakistan (SBP).

"In fact the government has been retiring its previous stock of debt with the SBP on its maturity," the ministry said in a statement while responding to news circulating on social media whereby an impression was being created that government had borrowed from the central bank.

The statement termed it grossly incorrect which depicted the limited understanding of the monetary variables.

It said, as reported in the monetary tables (M2), the government's borrowing from the SBP for budgetary purposes was calculated as the difference between the government's stock of borrowing from the SBP and its deposits with the central bank.

Therefore, net borrowing number may change due to fluctuation in cash balance with SBP and other accounting conventions, it said adding this change was not fresh budgetary borrowing by the government from SBP but just a change in government's cash balance with the SBP.

The ministry said, the government remained committed to complying with its obligations under the amended SBP Act and IMF programme conditions.

Prime Minister Shehbaz Sharif on Thursday reconstituted the 22-member Economic Advisory Council (EAC) to review the prevailing economic conditions in the country and propose stabilisation measures and possible corrective actions within the available resources.

The EAC includes a large number of members of the ruling PML-N and its coalition partners, proPML-N business leaders and representatives of the leading banks and Fauji Foundation, besides a few private sector economists.

Only three members of the previous EAC under the PTI government remain, including Arif

Habib, Mohammad Ali Tabba, and Dr Ijaz Nabi.

To be presided over by the prime minister himself, the council will have eight members from the PML-N, including former PM Shahid Khaqan Abbasi, Planning Minister Ahsan Iqbal, Finance Minister Miftah Ismail, Information Minister Marriyum Aurangzeb, Minister of State for Finance Dr Aysha Ghous Pasha and Minister of State for Petroleum Mussadiq Malik.