Islamabad
\nThe State Bank of Pakistan (SBP) has injected a significantly high amount of Rs11.85 trillion into conventional and Shariah-compliant commercial banks for up to 14 days, Business Recorder learnt on Friday.
\nThe injections are aimed at improving liquidity in the banking system to meet upcoming demand coming mainly from government to finance its fiscal deficit, according to an analyst.
\nThe government\u2019s reliance on domestic debt has once again gone up in the wake rise in expenditures and shortfall in collection of revenue in taxes by the Federal Board of Revenue (FBR).
\nCommercial banks borrow Rs9.61 trillion from SBP for 7 days
\nThe Ministry of Finance reported in its Monthly Economic Update & Outlook April, 2025 \u201cthe total expenditures rose by 23.2% to Rs10.36 trillion in July-March fiscal year 2024-25, with current spending up 17.2% to Rs9.56 trillion, markup payments (18.2%) and non-markup expenditures (15.7%). Development spending surged by 50.3%\u201d.
\nOn the other hand, it was learnt that the collection of revenue in taxes by the FBR hit a shortfall of Rs703 billion in the first nine-month of FY25, collecting a total of Rs8.46 trillion during July-March 2024-25 against the target of Rs9.17 trillion.
\nThe government has revised down the FBR\u2019s annual tax collection target from Rs12.91 trillion to Rs12.33 trillion for the ongoing fiscal year 2024-25.
\nThe breakup of the central bank\u2019s open market operations (OMO) data showed the bank supplied Rs11.15 trillion to commercial banks at an interest rate of 12.03% for 14 days. Besides, it injected another Rs447.45 billion in the banking system at interest rate of 12.09% for 7 days.
\nIt inducted Rs151.50 billion in Shariah-compliant banks at the rate of return of 12.10% for 14 days. And it supplied another Rs106 billion to them at 12.9% for 7 days.
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\nArif Habib Limited, Head of Research, Sana Tawfik said the injection of liquidity through OMOs remained high near and around recent high of Rs12 trillion for short durations of upto two weeks.
\n\u201cThis has resulted into conventional and Shariah-compliant commercial banks\u2019 outstanding loan rising back to the recent record high at around Rs12 trillion from the central bank,\u201d she said.
\nBanks were in need of the fresh financing from the central bank to repay their previous loans worth near Rs12 trillion they took some two weeks ago from SBP.
\nSBP conducts OMO to supply financing to banks, which they subsequently provide to the government to help it finance fiscal deficit amid shortfall in revenue collections.<\/p>\n","protected":false},"excerpt":{"rendered":"
Islamabad The State Bank of Pakistan (SBP) has injected a significantly high amount of Rs11.85 trillion into conventional and Shariah-compliant commercial banks for up to 14 days, Business Recorder learnt on Friday. The injections are aimed at improving liquidity in the banking system to meet upcoming demand coming mainly from government to finance its fiscal […]<\/p>\n","protected":false},"author":2,"featured_media":474988,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-474973","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n