It is indeed a matter of great satisfaction that the federal cabinet which met on Tuesday decided defer proposal on borrowing from global capital market. It has been reported by Business Recorder that the federal cabinet has deferred a proposal of Finance Division with respect to borrowing from international capital market for further discussion and directed it to provide data on interest rate. It was also reported that cabinet meeting presided over by Prime Minister Shahid Khaqan Abbasi discussed the proposal in detail and decided to defer it till next meeting with a directive to present a comparative analysis of interest rate.
How ironic it is that the government plans to raise loans from the international market by issuing bonds to support the foreign exchange reserves, which are under pressure due to widening trade deficit. It has been doing virtually nothing to arrest the export slide or reduce the quantum of non-productive imports. It appears to be clueless insofar as country's external balance is concerned. Moreover, it seems to be absolutely oblivious of growing government expenditure that is adding to the country's woes. Any further borrowing from the global market will certainly add to the size of country's debt stock and concomitant higher repayments.
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