The increase in the domestic debt in two months was mostly from rise in the stock of floating debt. However, the other two debt classes, permanent and unfunded, also contributed slightly.
During the first two months of 2005-06, the floating debt increased by Rs 51.489 billion; permanent debt by Rs 5.991 billion; and unfunded debt increased by Rs 2.495 billion. The permanent domestic debt comprises medium and long-term market loan, federal government loans, special government loans, federal instruments and prize bonds, which stands at 494.8 billion.
The floating domestic debt, mainly comprising short-term debt instruments and market treasury bills, maintaining a climbing trend, was recorded at Rs 778.1 billion at the end of June 2005. And, during the following two months it went up to Rs 829.6 billion.
The Bank's data shows that the unfunded domestic debt comprising National Saving Schemes (NSS) stands at Rs 852.55 billion grew by Rs 2.495 billion from Rs 850 billion at the end June 2005.
However, it says that the net mobilisation under all instruments of NSS, except relatively new instruments Bahbood saving certificates and pension benefit accounts, was once again negative during these two months.
Net withdrawals from these three most popular instruments of NSS ie 10-year Defence Saving Certificates (DSCs), five-year Regular Income Certificates (RICs) and three-year Special Saving Certificates (SSCs) totalled Rs 14.06 billion in two month of this fiscal year. It means that previously popular instruments - the DSCs, SSCs, and RICs - seem to have become less attractive for investors.
The SBP data shows that Pensioners Benefit Accounts and Bahbood Saving Certificates, both of 10-year tenure, attracted net fresh investment of Rs 45.29 billion and Rs 98.33 billion respectively.
Net investment in NSS fell primarily because their rates of return had become too low for investors to make net fresh investment as a result of gradual slashing in last few years.