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US govt could breach debt limit after Oct 1: Think-tank
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IANS | 07 May, 2021
A Washington, D.C.-based think-tank said that the US federal government
is likely to run out of borrowing room and breach the debt limit after
October 1.
"The Treasury's updated guidance means that the 'X
Date' will likely arrive after the start of fiscal year 2022," Shai
Akabas, director of economic policy at the Bipartisan Policy Center
(BPC), said in a statement on Thursday, referring to the date when the
federal government will no longer be able to pay its bills in full and
on time.
"That would realistically allow Congress to address the
debt limit as part of an appropriations package and potentially pair
that move with a longer-term reform of the statute to eliminate
financial risk from these recurring episodes," Xinhua news agency quoted
Akabas as saying.
Akabas also cautioned that the unique fiscal
environment of a pandemic adds unprecedented uncertainty to any debt
limit forecast.
"While uncertainty is perhaps greater than ever
before, the way to minimize short-term financial risk remains the same:
acting on the debt limit soon," he said.
The updated forecast
came after the Treasury Department said on Wednesday that it may take
certain "extraordinary measures" to continue to finance the government
on a temporary basis if the debt limit is reinstated on August 1.
"In
light of the substantial Covid-related uncertainty about receipts and
outlays in the coming months, it is very difficult to predict how long
extraordinary measures might last," the Department said, noting
extraordinary measures could be exhausted much more quickly than in
prior debt limit episodes.
As part of a two-year budget deal
passed by Congress in August 2019, the federal debt limit was suspended
through July 31, 2021.
If lawmakers cannot reach another
agreement before then, the ceiling would automatically be reinstated on
August 1 and the Treasury wouldn't be able to raise additional cash
from the sale of government securities.
As of today, the US national debt has exceeded $28.25 trillion.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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