Pakistan's total external debt and liabilities increased to US $ 96.1735 billion by the end of September 2018 with $65 billion long-term and over $31 billion short-term debt. According to Debt Policy Statement uploaded by the Finance Ministry on its website for fiscal year 2017-18 and first quarter of the current fiscal year, long-term debt over one year included $11. 498 billion, multilateral, $ 27.606 billion, other bilateral, $10.831 billion, Euro/Sukuk Global bonds, $7.300 billion, and commercial loans/credits, $6.826 billion.
Short-term less than one year loans included; from commercial banks and multilateral, $1.321 billion , IMF, $ 5.962 billion, foreign exchange liabilities, $4.996 billion, which included (i) central bank deposits $ 700 million, (ii) foreign currency bonds (NHA/NC), (iii) Other Liabilities (SWAP) $2.908 iv) allocation of SDR $1.379.
While under short-term debt, Public Sector Enterprises (PSEs), $2.846 billion, and guaranteed debt $ 1.337 billion, which included from other bilateral, $1.132, commercial loans, $ 200 million, and non-guaranteed debt, $1.509 billion. The banks debt with $3.010 billion borrowing and $1.443 billion nonresident deposits stood at $4.452 billion while private sector debt stood at $9.240 billion, and debt liabilities to direct investors - intercompany debt stood at $3.857 billion. Around 32 percent of total public debt stock was denominated in foreign currency exposing public debt portfolio to exchange rate risk.
Pakistan's reliance on commercial sources to finance external financing needs has relatively increased during the past few years and correspondingly the floating portion of external public debt has inched up to 28 percent in 2018 compared with 17 percent in 2015. The increase in floating portion of external public debt portfolio may pose some challenges going forward as international interest rates have started to exhibit upward trend. This rising interest rate scenario coupled with country's increased reliance on commercial sources may not only result in higher re-fixing risk but also increase the debt servicing in coming years.
As far as currency movements and revaluation impact was concerned, around Rs 1.2 trillion were added due to depreciation of rupee against dollar. Thereby, out of total increase of Rs 2 trillion witnessed in external public debt stock during 2017-18, around 59 percent was on account of revaluation losses.
The government could not fully comply with the provisions of FRDL Act 2005 in 2017-18 as it is committed to achieve the targets outlined in FRDL Act, 2005 for public debt management. In term of debt management standpoint, prime objectives of FRDL remain; (i) strengthening of debt management functions; (ii) fulfilling financing needs of the government at the lowest possible cost; (iii) broadening of the investor base through active involvement of other channels (Islamic banks, mutual funds, institutions and foreign investors) to reduce reliance on domestic bank borrowing; (iv) have a well-functioning domestic debt capital market; (v) lengthening of maturity profile of domestic debt through enhanced mobilisation from medium to long term securities to reduce re-financing and interest rate risks; (vi) and mobilisation of maximum available concessional external financing.
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