Govt has not borrowed from SBP

29

A news is circulating on social media whereby an impression is being created that Government has borrowed from State Bank of Pakistan (SBP) which is grossly incorrect and depicts the limited understanding of the monetary variables.

As reported in the monetary tables (M2), the government’s borrowing from the SBP for budgetary purposes is calculated as the difference between the government’s stock of borrowing from the SBP and its deposits with the SBP.

Therefore, net borrowing number may change due to fluctuation in cash balance with SBP and other accounting conventions. This change is not fresh budgetary borrowing by the government from SBP but just a change in government’s cash balance with the SBP.

 

Previous articleMock exercise conducted at Central Police Office
Next articleBitcoin jumps to $39,494 in mixed trading