KARACHI: The State Bank of Pakistan (SBP) posted a record profit of Rs3.4 trillion in FY24, providing significant support to the cash-starved government.

“According to the FY24 audited annual account of SBP, a record Rs3.4tr was earned in 2023-24 compared to Rs1.1tr in the preceding year,” said Topline Securities CEO Mohammed Sohail.

The central bank has been the government’s biggest profit-earner, surpassing any potential earnings from trade or industry.

Mr Sohail said the unprecedented 22pc interest rate was not good for the economy, but the SBP’s profits would support the government.

The government will have to spend Rs9tr on debt servicing in FY25.

The State Bank will transfer 80pc or Rs2.72tr of profit to the federal government.

“Higher interest rates and stable rupee helped SBP earn this huge profit,” said Mr Sohail, adding that the overall government’s liquidity has improved.

It was due to the improved liquidity the government rejected all the bids for the treasury bills this week while it raised less than half of the target through the auction of Pakistan Investment Bonds.

Published in Dawn, September 22nd, 2024