Banks have been facing tight liquidity position for the last one week. Overnight rates had risen to 9.4 per cent just below the discount rate of 9.5 per cent.
The heavy discounting was the reflection of tight monetary policy, which was also obvious from the slow credit growth for the private sector as it dropped significantly compared to last year.
According to the Statement of Affairs of the State Bank of Pakistan, for the week ended July 2February 24, 2007, both notes in circulation and those issued decreased in the week. Notes in circulation stood at Rs879,550.434 million against earlier week’s figure of Rs890,185.621 million, a fall of Rs10,635.187 million. When compared to the corresponding week a year ago when it was Rs792,536.655 million, the current week’s figure is higher by Rs87,013.779 million.
Total notes issued also declined in the current week over preceding week’s level. At Rs879,755.556 million it was smaller by Rs10,630.795 million over the figure of Rs890,386.351 million recorded a week earlier. In the corresponding week last year it amounted to Rs792,694.110 million, which shows current week’s figure to be higher by Rs87,061.446 million over last year’s corresponding figure.
Approved foreign exchange increased in the week to Rs559,913.111 million or by Rs472.483 million over preceding week’s figure of Rs560,385.594 million. When compared to the corresponding week a year ago, when the figure was Rs425,223.999 million, the current week’s figure is higher by Rs134,689.112 million.
Balances held outside Pakistan in approved foreign exchange increased in the week under review. It stood at Rs138,012.965 million over preceding week’s figure of Rs134,791.203 million, a rise of Rs3,221.762 million. Compared to last year’s corresponding figure of Rs147,660.594 million, the current week’s figure is smaller by Rs9,647.629 million.
Loans and advances of scheduled banks to the three sectors – agricultural, industrial and export showed a mixed trend in the week under review. The agricultural sector received Rs59,183.528 million, similar to preceding week’s figure. The current week’s figure is smaller by Rs1,524.336 million over last year’s corresponding figure of Rs60,707.864 million.
There was an inflow of Rs42,046.855 million to the industrial sector during the week under review, a rise of Rs197.675 million against preceding week’s figure of Rs41,849.180 million. When compared to last year’s corresponding figure of Rs4,912.572 million, the current week’s figure is higher by Rs37,134.283 million.
The export sector received Rs135,467.905 million against previous week’s figure of Rs135,872.146 million, a fall of Rs404.241 million. Current week’s figure was larger by Rs32,867.332 million over last year’s corresponding figure of Rs102,600.573 million.
According to the weekly statement of position of all scheduled banks for the week ended February 24, 2007, deposits and other accounts of the scheduled banks stood at Rs3,034.321 billion, higher by Rs25.461 billion over preceding week’s figure of Rs3,008.860 billion. Commercial banks deposits showed a rise of Rs25.57 billion over the week to Rs3,022.899 billion, against preceding week’s Rs2,997.329 billion, while of specialized banks it declined by Rs0.109 billion to Rs11.422 billion, over previous week’s Rs11.531 billion.
Borrowings by all scheduled banks increased during the week over preceding week’s figure. It rose to Rs425.687 billion over preceding week’s figure of Rs404.264 billion, a rise of Rs21.423 billion. This was primarily due to an increase in the borrowings by commercial banks, which rose to Rs342.930 billion against previous week’s Rs319.958 billion, or by Rs22.972 billion, while borrowings by specialised banks stood at Rs82.757 billion against preceding week’s figure of Rs84.306 billion, a decline of Rs1.549 billion.
Gross advances stood at Rs2,358.720 billion in the week under review, a decrease of Rs8.851 billion over preceding week’s figure of Rs2,367.571 billion. Advances by commercial banks decreased to Rs2,262.880 billion against earlier week’s figure of Rs2,271.736 billion, or by Rs8.856 billion, while of specialized banks it stood at Rs95.840 billion against preceding week’s Rs95.835 billion, showing a rise of Rs0.005 billion.
Investments of all scheduled banks increased in the week by Rs2.695 billion to Rs872.426 billion against preceding week’s figure of Rs869.731 billion. Commercial banks investment rose to Rs861.756 billion, from earlier week’s Rs858.618 billion, higher by Rs3.138 billion, while of specialized banks it stood at Rs10.669 billion against previous week’s Rs11.113 billion, lower by Rs0.444 billion.
Cash and balances with treasury banks of all scheduled banks increased by Rs10.563 billion during the week to stand at Rs321.821 billion against earlier week’s Rs311.258 billion. The figure for commercial banks rose to Rs319.544 billion against preceding week’s figure of Rs308.991 billion, a rise of Rs10.553 billion. For specialized banks there was a rise of Rs0.009 billion to Rs2.276 billion, against earlier week’s figure of Rs2.267 billion.
Total assets of scheduled banks stood at Rs4,107.369 billion, higher by Rs44.068 billion, over preceding week’s figure of Rs4,063.301 billion. Meanwhile, commercial banks assets stood at Rs3,994.771 billion, larger by Rs44.657 billion over previous week’s figure of Rs3,950.114 billion. Specialized banks assets declined by Rs0.588 billion to Rs112.599 billion against previous week’s Rs113.187 billion.