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Govt. borrowing to reach PkR 1.07 trn in 2QFY12

Karachi: The government intends to borrow PkR 1.07 trn through the auction of Pakistan Investment Bonds (PIBs) and Market Treasury Bills (Tbills) during 2QFY12 owing to increased current expenditure and lack of adequate revenue generation which has led the government to borrow massively from the domestic banking system.

According to Alfalah Securities, the State Bank of Pakistan (SBP) has planned a schedule of three phases for the government to borrow PkR 45 bn through PIBs whose first auction would be held on Oct 12 2011, second on Nov 23 2011 and third auction on Dec 21 2011. While, the auction for T-bills worth PkR 1.025 trn would be held in seven phases starting from Oct 6 2011 till Dec 2011. The borrowing will increase the money supply in the system while having a crowding out affect on the private investment.

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