KATHMANDU: The obligation of the Treasury Bills that the government is issuing to collect the internal debts is on the rise every year.
The fiscal liability incurred from the Treasury Bills has sharply increased after its rollover as the government failed to pay back the principal amount.
The government issues the Treasury Bills as the short-term bond to raise funds for the period less than a year.
According to the Public Debt Management Office, the government’s obligation for the internal debt is likely to exceed Rs 473 billion.
Under Secretary at the Office Dilaram Giri said that the Office has sought Rs 100 billion from the government to pay back some percent of the total amount in the upcoming fiscal year.
“We have asked to prioritize the clearance of the principal amount of the debt. The amount was sought to pay back the debt amount of the Treasury Bills by 25 per cent every year,” he added.
According to the Office, a total of Rs 337 billion has been sought from the government in the fiscal year 2080/081 BS for the fiscal management to repay both the internal and external debts’ principal amount and interest.
However, the government is not in a position to provide the amount as asked by the Office due to reduced amount of revenue collection.
Assistant Spokesperson of Nepal Rastra Bank (NRB) Narayan Prasad Pokharel said that some 80 to 90 percent of the Treasury Bills are rolled over so far.
“The internal debt should be raised as targeted by the budget. But, the government can ask not to continue it if sufficient revenue was collected and other sources of budget were explored,” Pokharel argued.
From the payment of the Treasury Bills, the banks and financial institutions will have sufficient liquidity and that could contribute to lower the interest rate.
However, the BFIs seem more focused on investing in Treasury Bills.
The NRB is issuing Treasury Bills of Rs 22.10 billion to raise the internal loan and the maturity time for the amount ranges from 28 to 364 days today.
As per the Public Debt Management Office, the government’s sovereign debt is Rs 2070.53 billion including Rs 968.1 billion internal debt.
Hemanta Joshi/RSS
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