Content area
Full Text
_: State Bank of Pakistan (SBP) has recently updated the money supply (M2) figures up to 2nd May'14. According to the details, Net Foreign Assets (NFA) of banking sector surged by 47% FoF to Rsll6 billion as against Rs79 billion a fortnight ago. NFA has been positive for the last three weeks in succession after being negative since Ianuary'13. The main reason of this improvement is sturdy inflows from IMF, ADB, Euro Bond and foreign partners, in addition to the better revenue collection and tighter control on subsidies. NDA on the contrary declined by 3% FOF to Rs426 billion as opposed to Rs439 billion recorded previously. The key reason behind NDA dip was 14%FoF (Rs27 billion) fall in government borrowings.
Government borrowings went down by Rs27 billion (14%FoF) to Rsl62 billion as against Rsl89 billion fifteen days ago while the borrowing of the same for budgetary support also came down by 15%FoF. In addition to this, on a yearly basis, Government borrowings for budgetary support plunged by a hefty 73% mainly on account of better fiscal position. Government sector borrowing has seen a change in trend as the focus seems to be shifting from SBP to scheduled banks. The fact is visible as borrowing from SBP stand currently in negative Rs287 billion as against positive Rs376 billion a fortnight ago. Moreover, scheduled banks borrowing boomed up to Rs563 billion, in contrast to negative Rs50 billion recorded 15 days ago.
Credit to non-government sector portrays a healthy picture on YoY basis growing by 109% to Rs386 billion as compared to Rsl85 billion during the same period last year. A 126%YoY growth in private sector credit of Rs320 billion was the major contributor in non-government sector growth. However, on a fortnightly basis, credit...