- Recent money supply figures indicate M2 growth picking up as it reached 11.54% YTD (13.3% YoY). Weekly comparison shows a 3.4% jump in currency in circulation while deposit base depicted a decline of 0.3% compared to previous week's balances.
- With external account showing continuous deterioration, country's NFAs showed decline of USD2.9bn YoY up till Jun8'12. On the other hand, NDAs continue to drive domestic money supply as they rose by 19% YoY. The result is aptly reflected in the NDA-NFA ratio, which has now deteriorated to 14x compared to 8x during same period last year.
- Total GoP borrowing from the banking system has reached PKR 1,185bn (on cash basis) out of which borrowing from SBP is now at PKR 509bn. On YoY basis, borrowing from SBP is 19% higher while it now contributes 45% to total outstanding borrowing from the banking system.
- Despite heavy borrowing currently driving money supply and crowding out private credit, GoP's investment remained static at 2.1% of GDP in FY12, unable to coup up with the decline in private investment.
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