Net federal government borrowings from the central bank for budgetary support have reached Rs532.5 billion since the start of the current fiscal year up till June 13, according to the latest data released by the State Bank of Pakistan (SBP).
Net borrowings from the SBP between July 1 and June 13 remained 25.6% higher than Rs423.7 billion that the federal government borrowed from the central bank in the comparable period of 2012-13.
This is in sharp contrast to last week’s figures that showed net federal government borrowings from the central bank for budgetary support to be only Rs382 billion until June 6, which was 13.4% less than the corresponding amount of borrowings in the comparable period of 2012-13.
On June 11, the State Bank of Pakistan accepted bids of Rs90 billion with a realised value of Rs86.8 billion for the sale of three-, six- and 12-month market treasury bills (MTBs).
The federal government has drastically reduced its reliance on the banking sector, as its borrowings from commercial banks have dwindled notably. Net federal government borrowings from scheduled banks until June 13 remained in the negative zone, with the government retiring Rs35.8 billion during the period. In contrast, the corresponding figure for 2012-13 was Rs880.9 billion.
SBP data shows banks’ credit to the private sector has increased significantly in 2013-14. Credit to the private sector between July 1 and June 13 stood at Rs294.3 billion, which is more than 33 times higher than the amount of private-sector credit (Rs8.8 billion) extended in the comparable period of the last fiscal year.
Credit to the private sector touched a six-year high in the outgoing fiscal year. According to the recently released Economic Survey of Pakistan that compared monetary aggregates for the July-May period of the last many years, private sector credit remained Rs217 billion, Rs122 billion, Rs113 billion and Rs20 billion in 2011-12, 2010-11, 2009-10 and 2008-09, respectively.
Overall, money supply in the economy has increased by 9.35% since the start of the current fiscal year as opposed to the growth rate of 12.78% recorded in the comparable period of 2012-13.
The expansion in broad money – commonly referred to as M2 – between July 1 and June 13 remained Rs828.5 billion, which is significantly lower (15.1%) than the monetary impact of Rs976.6 billion recorded over the corresponding period of the last fiscal year.
Provisional data on monetary aggregates shows the currency in circulation has increased by Rs308 billion since the start of the current fiscal year. The increase in the currency in circulation during the same period of the last fiscal year was Rs338 billion.
Total currency in circulation as on June 6 stood at Rs2.2 trillion, SBP monetary aggregates show.
Published in The Express Tribune, June 26th, 2014.
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This is why the Governor of the State Bank is regarded as an extension of the Finance Ministry...........being a Singaporean passport holder I doubt he's even bothered about the harm that he is causing.
Gov't is borrowing as much as it can because it knows the end days are near, so loot as much as they can. But don't worry, Qadri will soon conquer Pakistan. We won't need any loans, we will use looted money from Swiss accounts. Qadri the great, Qadri the lion. JIYE QADRI JIYE QADRI.