Govt's money supply up by 3.9pc to Rs 625.3 billion: Survey

ISLAMABAD: During the period July-April, FY2019 the government's money supply increased by Rs 625.3 billion (growth of 3.9 percent) compared with Rs 601.8 billion in comparable period last year.

According to Economic Survey launched by ministry of finance on Monday, within broad money, Net Foreign Assets (NFA) of the banking sector contracted to Rs882.4 billion during July-April, FY2019 against contraction of Rs 475.4 billion during the comparable period last year.

Similarly, during the period July-April, FY2019 Net Domestic Assets (NDA) of the banking sector registered an expansion of Rs1,507.7 billion (growth of 9.3 percent) compared with Rs1,077.2 billion (7.7 percent) during the same period last year.

On the other hand, reserve money posted an expansion of Rs488.0 billion (growth of 8.9 percent) during July-April, FY2019 against Rs 260.5 billion (growth of 5.4 percent) last year.

Credit to Public Sector Enterprises (PSEs) also increased to Rs 312.1 billion during the period July-April, FY2019 against Rs 153.2 billion during the same period last year.

During July-April, FY2019 government borrowed Rs 1,073.0 billion for budgetary support compared to Rs 850.0 billion in the same period last year, of which, government has borrowed Rs 3,204.7 billion from SBP as compared to Rs 1,316.1 billion last year.

On the other hand, government retired Rs 2,131.7 billion to scheduled banks against retirement of Rs 466.1 billion during the same period last year.

Net government sector borrowing thus remained at Rs 908.0 billion during the period under review compared with Rs 813.6 billion during the corresponding period last year.

During the period July-April, FY2019, flows of private sector credit has been recorded at Rs 580.9 billion compared with Rs 498.5 billion during the same period last year, witnessing Year on Year (YoY) growth of 15.1 percent against a growth of 14.7 percent during the same period last year.

During July-March, FY2019 working capital credit demand increased to Rs 369.0 billion against Rs 215.3 billion in the same period last year. Credit demand for fixed investment decelerated to Rs 83.1 billion during July-March FY2019 compared to Rs 148.1 billion during the same period last year.

Prudent risk-based regulations have also helped the banking sector to maintain a strong solvency profile. Capital Adequacy Ratio (CAR) improved to 16.2 percent as of end December-2018; well above the minimum required level of 11.90 percent and global benchmark of 10.5 percent, the survey added.