Government borrowings by way of selling Treasury (T)-Bills and T-Bonds to the market, is set to increase to Rs 808,480 million or Rs 0.81 trillion by the weekend, in the calendar year to date, with a T- Bill and T- Bond auction totalling Rs 49 billion due, during the week.
This will be an increase of Rs 415,871 million or 105.92% when compared with the comparative period last year.
Meanwhile, foreign exits from the GSM and the SM in the calendar year to date have been Rs 6.56 billion. In contrast, these markets in the same period enjoyed a Rs 63.75 billion increase or net foreign inflow (NFI), translating to a 110.3% decline in such investments in the review period, thereby contributing to depreciating pressure on the rupee.
Meanwhile, money printing, reflected by Central Bank's T-Bill holdings, increased to Rs 12.89 billion currently. In contrast in the comparative period last year, this was a miserly 32.82 million. The current increase translates to a 39,187% hike in money printing between the two comparative periods, thereby hitting the poor and the fixed wage earner the hardest.
Further, the Government's external commercial borrowings in the two comparative periods increased by 2.3% or by US$ 38.75 million to $ 1,687 million. In other developments, Government's foreign reserves in the two review periods, ie end May 2015 vis-à-vis end May 2014, fell by $ 1921.74 million or by 21.9% to $ 6,850.92 million and its foreign currency reserves by $ 1,876.81 million or by 24.8% to $ 5,914.95 million.
Such falls have been exacerbated by the Government's defence of the rupee. According to available data, in the first four months of the year, the Government's foreign reserves in the first four months of the year experienced a net foreign outflow of $ 428.96 million due to such actions. Whereas in the comparative period last year, the Government's foreign reserves on a net basis increased by $ 504.6 million due to NFIs, before further strengthening to $ 636.1 million by May 2014, because of sustained NFIs. Data pertaining to the Government's intervention in the foreign exchange market last month has not been released thus far.