The State Bank did not release the monetary statistics for 8th April because of inconsistencies found in the balance sheet of a major bank leading to wrong conclusions.
For the same reason, the State Bank failed to upgrade scheduled banks'' data for the week ended 15th April although State Bank''s own data were available as far ahead as 22nd April. Most of the analysis that follows is, therefore, based mainly on data released with the balance sheets of the central for the weeks ended 8th, 15th and 22nd April.
From these data, covering balance sheets of SBP''s Issue and Banking Departments, it transpired that government borrowing from the banking system, which stood at Rs 43 billion on 1st April, increased by about Rs 18 billion to Rs 61 billion on 8th based on an increase of about Rs 5.5 billion in SBP''s holdings of government securities and a decline of about Rs 12.5 billion in government deposits with it.
On the same basis, on 15th, it stood reduced by about Rs 54 billion to about Rs 7 billion based on a fall of about Rs 45 billion in SBP''s holdings of government securities and an improvement of about Rs 9 billion in government deposits with it.
And based yet on SBP''s advance data for 22nd April, government borrowing appeared to have declined further by Rs 20 billion to a net retirement of Rs 13 billion accounted for by a fall of about Rs 27 billion in SBP''s holdings of government securities adjusted for a drawdown of about Rs 7 billion in government deposits with it.
Again, on 1st April, budgetary borrowing from banking system amounted to about Rs 76 billion. Based on above information, it should have increased by about Rs 18 billion to Rs 94 billion on 8th April and then should have declined by Rs 54 billion to Rs 40 billion on 15th and further by Rs 20 billion to about Rs 20 billion on 22nd April.
The feat, involving these downward changes in both government borrowing and budgetary borrowing, was performed by the Finance Division, who successfully floated abroad sovereign dollar bonds worth about $800 million in March and the Privatisation Commission, who successfully renegotiated the PTCL''s sell-off to Etisalat again in March and realised about $1.2 billion in instalment payments from it. The sale of this foreign exchange to the State Bank generated a hefty rupee revenue for the government.
Indeed, figures of both government borrowing and budgetary borrowing would change upward or downward depending upon the level of scheduled banks holdings of government securities and government deposits with them as on these dates besides the position of government borrowing from banks for commodity operations.
Both types of borrowings are likely to be higher marginally because of change of hands of government securities between the central bank and the scheduled banks to account for fresh auctions and open market operations and commodity operations involving increasing wheat procurement by the government.
Money supply during the year so far had increased by Rs 290.7 billion as on 1st April. Based on information regarding changes in currency in circulation, money supply might have increased by Rs 16 billion to about Rs 307 billion as holdings of foreign reserves by SBP''s Issue Department increased by about Rs 38 billion while this department''s holdings of government securities declined by about Rs 22 billion.
On the same analogy, money supply might have increased by Rs 1.4 billion to about Rs 308 billion on 8th (foreign reserves up by over Rs 18 billion and government securities down by Rs 16.5 billion) but might have declined by over Rs 8 billion to Rs 300 billion on 22nd (foreign reserves up by Rs 21 billion and government securities down by Rs 29.4 billion).
These figures would indeed change when data with regard to bank deposits become available for these dates.
Among other developments, liquid foreign exchange reserves of the country which improved to $12,484.3 million on 1st April due to government sale of $1.3 billion worth of foreign exchange to the State Bank on 31st March, stood reduced to $12,401.6 million on April 8 presumably because of payment of some maturing foreign liability between April 1 and 8.
But the reserves surged to $12,906.5 million or close to the $13 billion mark as on 15th April presumably because of late adjustment of Etisalat''s payment of $660 million deposited with the State Bank or its agent on 7th April and further to $12,910.2 million on 22nd April ($10,549.2 with SBP and $2,361 million with banks) because of additional sale of privatisation proceeds in dollars to the State Bank.
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