Pakistan took out 15.32 billion US dollars in new foreign loans in the fiscal year 2020-21, according to a new government report. The Pakistani rupee has depreciated 30.5 per cent against the US dollar in the last three years and four months under the current government of Pakistan Prime Minister Imran Khan.
According to a new official data, Pakistan took out 15.32 billion dollars in fresh foreign loans in fiscal year 2020-21, shattering the previous record of 10.45 billion dollars.
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| Pakistan Prime Minister Imran Khan | Photo: TIH Archives |
According to The Express Tribune, the current government has nearly doubled Pakistan's external debt in just three years, adding 35.1 billion US dollars to the total, bringing the total to an incredible 85.6 billion US dollars.
According to The Express Tribune, a report issued by the Ministry of Economic Affairs stated that new debt was added "to mitigate the pressure on the current account deficit, strengthen foreign exchange reserves, enhance external debt servicing capacity, and provide necessary financing for water sector development."
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According to the publication, the massive borrowing used to plug the current account deficit has already started to dry up.
To alleviate the current account stress created by the enormous import bill, another year of record borrowing is very certain.
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The finance ministry stated in September that the devaluation of the Pakistani rupee was responsible for 2.9 trillion rupees of the increase in overall public debt.
Under the current government of Pakistan Prime Minister Imran Khan, the Pakistani rupee has depreciated by 30.5 percent versus the US dollar in the last three years and four months.
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According to The News International, the Pakistani rupee has lost 30.5 percent of its value against the US dollar in the last 40 months, falling from Rs 123 in August 2018 to Rs 177 in December 2021. This is one of the most significant currency devaluations in the country's history.
The only other bigger devaluation happened in 1971-72, following the fall of Dhaka, when Pakistan's currency was depreciated by 58 percent, from Rs 4.60 to Rs 11.10.