Net Foreign Assets of banking system decreased 33.4% in FY12

The contraction in NFA is mainly due to a reduction in SBP’s foreign exchange reserves. PHOTO: FILE.

According to the State Bank of Pakistan (SBP), Net Foreign Assets of the banking system contracted by Rs260.3 billion during the last fiscal year – decreasing 33.4% – compared to a 43.1% expansion of Rs235.0 billion during the corresponding period of the previous year.

The contraction in NFA is mainly due to a reduction in SBP’s foreign exchange reserves, which arose from the widening of the current account deficit and deteriorating capital and fiscal account surpluses.

The Bank said the Net Domestic Assets (NDA) of the country had stood at Rs1,224.2 billion during the last financial year, which depicts growth of 20.7% against the corresponding period of the previous year.

According to the State Bank, credit disbursement to the private sector has shown positive growth to the tune of Rs235.4 billion, showing an increase of 7.5% during fiscal 2011-12, as compared to Rs121.3 billion during the corresponding period of pervious year.

On the other hand, government borrowing for budgetary support stood at Rs1,267.7 billion during the last fiscal year, indicating an increase of 48.7%; against Rs590.2 billion during the corresponding period of the previous year.

Published in The Express Tribune, September 2^nd, 2012.