Govt lifts all bank liquidity as private credit offtake goes negative

Dawn | Aug 16, 2019 at 7:17 AM
  • With banks parking their money in risk-free government securities in huge sums, private sector has found no space to borrow from financial institutions since the beginning of FY20.
  • This shift in government’s borrowing to the private banks came as a result of SBP’s decision to stop lending to the centre and finance its cash shortages.
  • The persistent rise in policy rates by the central bank lured private sector to start investing in the government papers.