ISLAMABAD FEB 01 (DNA) :  Federal Minister for Economic Affairs Hammad Azhar on Saturday said that the devaluation became inevitable due to flawed economic policy of the previous government that led to highest external deficit, depleting foreign reserves and top debt servicing.

He took to Twitter and said that Pakistan’s public debt increased from 72 per cent to 84 per cent of GDP during the fiscal year 2018-19 as close to half this increase came from devaluation, which is re-evaluation of pre-existing debt at market exchange rate. He further said that Rs 1.2 trillion of cash reserve was creating by one time debt prior to moving towards a policy of zero borrowing from the State Bank of Pakistan (SBP).

Hammad Azhar expressed that debt-to-GDP proportion is projected to decrease in coming years due to current stabilizing and deficit receding.

“Statistically masking or undervaluing actual value of debt by an over-valued exchange rate, artificially kept afloat by depleting forex reserves & more debt is not sustainable,” he added.