ISLAMABAD: The government's mark-up payable in the first quarter of 2021-22 is not precisely one quarter of the total mark-up budgeted for the year because of the maturity profile of Pakistan Investment Bonds (PIBs) issued by the government at different tenors.
An official on condition of anonymity said that mark-up payment differs in each quarter of the fiscal year on the basis of maturity profile of PIBs of different tenors and this may be the reason for Rs622 billion mark-up in the first quarter against budgeted Rs3059 billion for the entire fiscal year.
An official of State Bank of Pakistan said that mark-up payment is not equally divided in the four quarters as calculating mark-up payment requires maturity and rate of PIBs to be taken into consideration. He further clarified that rate of three-month PIB differs from six-month PIB, which effects the mark-up payment for any quarter.
According to consolidated fiscal operation released by the Ministry of Finance on Tuesday, mark-up payment for the first quarter of 2021-22 were Rs622 billion against Rs3,059 billion earmarked in the budget for the entire fiscal year. Mark-up payment on domestic borrowing was Rs571 billion and on external borrowing Rs52 billion. Finance Ministry maintains that the government was able to borrow via long-terms bonds at relatively low rate.
Copyright Business Recorder, 2021
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