Government SECURITIES

Muhammad Ghani

Impact Assessment

GOVERNMENT SECURITIES

MONETARY POLICY

BUDGETARY DEFICIT

GOVERNMENT SECURITIES

Government SECURITIES

• Government’s debt obligation

• No default risk

• Fully tradable

• Generally eligible for SLR

What• T-Bills

• CMB – for temporary mismatches

• Dated Securities – Qualifies for SLR

• SDL – Qualifies for SLR

Types

BUDGETARY DEFICIT

Government SECURITIES

• Revenue Deficit (Revenue Exp – Revenue Receipts)

• Fiscal Deficit (Total Exp – (Rev + Non Debt Cap Receipts))

• Primary Deficit (Fiscal Deficit – Interest Payments)

Measures• Revenue Deficit Uses savings to finance consumption expenditure

• Capital Deficit Considers receipt from T-Bill Sale

Impact

MONETARY POLICY

Government SECURITIES

• Control the supply of money

• Achieve high economic growth

• Optimize interest rates

What

• Establish price stability

• Controlled expansion of credit

• Promotion of Fixed Investment

• Efficient financial system

Objectives

MONETARY POLICY

Government SECURITIES

• Open Market Operations (OMO)

• Cash Reserve Ratio

• Statutory Liquidity Ratio

• Repo Rate-Reverse Repo Rate

How• Sale/Purchase

• Higher the CRR – lower the liquidity

• Liquid asset with Banks through SLR

• Borrowing/Lending for rate for banks against

Impact

Thank You…Government SECURITIES