Pakistan debt: The case of the missing $5.7 billion

It seems Pakistan's finance ministry and its central bank are not on the same page when it comes to calculating the government's short-term borrowing activity as their figures have an apparent discrepancy of $5.7 billion.

The office in the Pakistan's finance ministry charged with keeping track of the country's total debt and liabilities appears to have no clue about government's short-term borrowing activity in the local bond market, The Express Tribune daily said in a report on Monday.

It added the office was unable to explain an apparent $5.7 billion discrepancy between the amount of loans that the finance ministry claims it paid back and the repayment numbers tracked by the central bank.

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According to the State Bank of Pakistan, the government paid back $7.8 billion in principal on public debt during the fiscal year that ended June 30 this year.

The finance ministry's figure for the same category is $2.2 billion.

The discrepancy came to light during an internal meeting at the finance ministry, headed by Finance Secretary Waqar Masood.

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To the shock of all of the officials present, the Director-General of the Debt Office, Masroor Qureshi, appeared to be completely unaware of the discrepancy, the daily said quoting sources.

This is the second time in recent weeks that the Debt Office's claims on the nation's financial liabilities have been called into question by the State Bank.

Earlier, the central bank had come up with figures for Pakistan's overall debt and liabilities that were much higher than those declared by the finance ministry.

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The main source of the discrepancy appears to be about $4.9 billion in short term borrowing from local banks, the report said.

The maturity on all of these loans was less than one year.

However, the finance ministry appears to be completely unaware about this borrowing.

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S M Husnain Bukhari, a senior official at the State Bank, said that most of this money was borrowed for liquidity management purposes, with some even being borrowed overnight.

He added that he was not surprised that the figure was not reflected in the finance ministry's documents.

"He did, however, add that the central bank's figures were accurate and reflected a true picture of the country's financial affairs," the daily said.