Pakistan's external debt has almost doubled in last 3 years, according to the report by Express Tribune The Pakistani currency has also depreciated 30.5% against US dollar in last three years and four months under the prime ministership of Imran Khan. The incumbent government has almost doubled Pakistan's external debt in just three years, adding 35.1 billion US dollars to take the total figure to an astonishing 85.6 billion US dollars. Last month, International Monetary Fund rejected pakistan's request to borrow from the central bank amid the ongoing financial crises in the country.
Key Points:
1. Pakistan took 15.32 billion dollars in new foreign loans for the 2020-21 fiscal year breaking the previous record of 10.45 billion US dollars. The total figure of the debt has now summed upto 85.6 billion US dollars in last 3 years.
2. The finance ministry of Pakistan in september mentioned that depreciation of currency has led to increment of 2.9 trillion pakistani rupees in total public debt.
3. The value of pakistani rupee has depreciated from ₹123 USD in August 2018 to ₹177 in December 2021. Shockingly, it lead to the highest of all the currecy depreciations in the history of the country, reported the News International.
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4. The report release by Ministry of Economic Affairs stated that new debt was borrowed to mitigate the pressure of current account deficit, build up foreign exchange reserves, reinforce external debt servicing capacity and provide adequate financing in water sector development but the heavy borrowing to boost up the current account deficit has started to dry. The ministry further added, "it is highly likely that we will see another year of record borrowing to reduce the stress on the current account caused by the massive import bill".
5. Studies done by economistst stated that the inflation in country stands at 11.5% on a monthly basis. Two percent of inflation comes from the depreciation of the exchange rate.
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