PTI govt printing Rs21.83 billion currency notes daily
Bills circulating in market reach historic level of Rs64.46 trillion
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The PTI government has made the coronavirus an excuse for printing currency as new notes worth Rs21.83 billion were printed daily on average during the first week of May.
In this scenario, 24NewsHD TV channel reported that the value of currency in circulation reached the mark of around Rs64.46 trillion for the first time in Pakistan’s history.
Amid the distribution of money among the poor and the rise in other government expenditure, the government opted to printing currency, as the State Bank said new currency worth over Rs152.79 billion came into circulation in the said period.
On the other hand, the currency notes worth over Rs787.93 billion have been printed during the past 10 weeks since the outbreak of coronavirus pandemic.
During first eight months of the financial year, the government had issued new currency bills worth Rs338.90 billion. It means there has been an increase of more than 132 percent in printing currency in the next 10 weeks.
These figures are startling as the official figures show that only Rs96 billion have been distributed among the poor since the pandemic outbreak, meaning that the cash handouts and other related measures can’t be a reason behind this frenzy.
This revelation means the country will continue experiencing an alarming inflationary trend due to this practice despite the latest reduction in interest rate.
The State Bank of Pakistan (SBP) on Friday had reduced the policy rate by 100 basis points (1 percent) on Friday.
This cut means that the policy rate has been reduced by 5.25 percent during the last two months after which the interest rate currently stands 8 percent.
Last month, the central bank’s Monetary Policy Committee (MPC) had reduced the policy rate by 2 per cent after a 1.5 percent cut in March.
However, many in the business community won’t be satisfied by the latest decision as some of them were calling for 2 per cent reduction in the interest rate.
The interest rate have been slashed around the world in an attempt to mitigate the effects of the coronavirus pandemic.
However, the government had been facing criticism for very high interest rate even before the pandemic as industrialists and businessmen view it hindrance in economic development amid higher cost of doing business and a reduced purchasing power.