Govt securities

1. Government SECURITIES
Muhammad Ghani
Impact Assessment

2. GOVERNMENT
SECURITIES
MONETARY POLICY
BUDGETARY DEFICIT

3. 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

4. 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

5. 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

6. 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

7. Thank You…Government SECURITIES