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Will the low interest rates support the private sector?

  Current benchmark interest rate at 7 percent is the lowest in 42 years in Pakistan. Last month, the central bank kept its policy rate unchanged at after lowering its rate by 100 bps to 7 percent as it was in May. The cut in interest rates would only benefit the economy if the initiative is to support the private sector, otherwise the government’s excessive borrowing from the banking system …

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Performance of the banking sector in Pakistan — Impact of low interest rate on credit

  The banking sector through CY13 faced tough challenges with external factors including law and order situation, political uncertainty, strikes causing closure of bank branches in distressed areas to name a few. SBP require banks to have minimum capital of PKR 10 billion by December 2014 which has been a challenge for few banks. The CAR for the banking industry was 17.1 percent in CY14 as compared to 14.9 percent …

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The phenomenon of increasing prices

  The economics of public debt is intriguing as well as fascinating! In interest-based capitalistic system, one cannot underestimate the value of debt. The system is designed such that economic progress and growth are made subject to ever-increasing prices of goods and services. The phenomenon of increasing prices is sustained by a corresponding increase in money stock through additional printing of currency. The additionally printed currency, going into an economy’s …

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