Pakistani Banks Fail to Lend ‘Surplus’ Cash to Businesses | Dawn News English

Banks in Pakistan are struggling to use their surplus liquidity as the federal government has paused borrowing, and the private sector remains hesitant to enter the money market, according to banking experts. Traditionally, the government has been the largest borrower, but after the State Bank injected Rs2.7 trillion, it has stepped back.
Despite significant interest rate cuts—450 basis points this fiscal year—the private sector isn’t ready to invest. Analysts warn the investment climate feels unwelcoming, with real interest rates still above 10 percent. Since September 16, the State Bank has not updated private sector borrowing data, but banks have shown willingness to lend, as evidenced by Rs300 billion loans to the Pakistan Agriculture Storage and Supplies Corporation and Rs160 billion to the Trading Corporation.
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