The Treasury plans to seek parliamentary approval shortly, to raise the governments Rs. 316 bn total borrowing limit by around Rs. 50 bn.
Of the fresh issues, Rs. 33.4 bn will come from converting expensive Rupee Loans, which carry a call option, into low cost long-term bonds.rn
rnMostly held by captive sources like the state pension funds, the long-term Rupee Loans, usually carry double digit coupons. But now since interest rates are much lower, the Treasury is keen re-call the debt and re-issue fresh securities.rn
rnThe balance new borrowings, will be channelled to fund North East rehabilitation projects, Treasury sources said.rn
rnIn June this year, the government raised around US$ 33 mn for the Ministry of Rehabilitation, Resettlement & Refugees, to develop the infrastructure in the Northern and Eastern provinces. rn
rnThe 13 'bd year loan funded by HSBC, is the longest ever foreign commercial borrowing so far.rn
rnThe government is also expected to push through several supplementary estimates to get additional funds for electricity, roads and water projects.rn
rnThis will allow the government to make use foreign funds and speed up capital projects in the three sectors, without waiting for the next budget.rn
rnLast year, the government made fiscal history by not moving a single supplementary estimate.rn
rnBut treasury officials say these supplementary estimates are not for current expenditure but only for capital projects.rn
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