Friday Nov 22, 2024
Friday Nov 22, 2024
Monday, 4 July 2022 02:23 - - {{hitsCtrl.values.hits}}
Private sector had borrowed only Rs. 2 billion in May, a sharp plunge in comparison to recent months. As per latest data of the Central Bank, credit to the private sector by May stood at Rs. 7,754 billion as against
Rs. 7,752 billion in April, reflecting a mere Rs. 2 billion increase.
In contrast, January and February saw borrowings of over Rs. 30 billion each.Analysts attributed the sharp plunge in borrowings in May to the economic crisis as well as hike in interest rates.
In March and April, the cumulative private sector borrowing figures saw an aberration following the 30-40% depreciation of the rupee. CBSL also doubled policy rates to 15% in April.
By end 2021, cumulative private sector borrowing stood at Rs. 6,981 billion or Rs. 6.98 trillion and by March it jumped to Rs. 7,529 billion or Rs. 7.5 billion and to Rs. 7,752 billion or Rs. 7.75 trillion.
CBSL data also showed that Broad money (M2b) expanded by 18.6%, on a Y-o-Y basis, in May 2022. In April the increase was 20%.
Net Credit to the Government from the banking system declined by Rs. 49 billion in May 2022 to Rs. 6.5 trillion and outstanding credit to public corporations increased by Rs. 25 billion in May 2022 to Rs. 1.75 trillion.
CBSL said the sharp depreciation of the rupee since March 2022 remains the key reason for the augmentation of monetary and credit aggregates in rupee terms in March 2022 to May 2022.
Weekly AWPR for the week ending 1 July 2022 increased by 35 bps to 22.62% compared to the previous week.
