Karachi June 08’2021: Money supply grew by 8.4 percent or PKR1,759 billion to PKR22,667 billion during the period from July 2020 to May 28 2021. The reason of growth in money supply is substantial increase in Net Foreign Assets. However, in comparison to previous year the Money Supply growth is on the lower side. During the period from July 2019 to May 2020, money supply posted growth of 12.8 percent.
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Increase in Net Foreign Assets (NFA) mainly contributed by surge in SBP NFA. SBP NFA increased by PKR851 billion to PKR670 billion while those held by commercial banks increased by PKR165 billion. Current Account Surplus of USD773 million during the first 10 months of this fiscal year and success of Roshan Digital Account along with tapping international markets both government and sovereign entities helped in building Foreign Assets.
On the other side, Net Domestic Assets (NDA) recorded increase of PKR743 billion solely on the basis of contribution from Scheduled Banks as total deposits held by Scheduled Banks increased by PKR936 billion during the period. NDA held by SBP reduced by PKR494 billion to PKR6,491 billion as of May 28 2021. In Banking sector deposits, demand deposits is the only head that showed increase. During the period, Demand Deposits of commercial banks increased by PKR1,085 billion as compared to increase of PKR452 during the period from July 2019 to May 2020.