Pakistan Central Bank to Cut Cash Reserve to Improve Liquidity: Bloomberg

By Khalid Qayum

Oct. 9 (Bloomberg) -- State Bank of Pakistan, the nation's central bank, said it will cut the cash reserve requirement for banks by two percentage points to improve liquidity in the financial markets.
The central bank will slash the cash reserve, or the proportion of deposits banks must set aside as cash, for all deposits up to one year by one percentage point to 8 percent from Oct. 11, according to a statement late yesterday by Karachi-based State Bank. The measure will be cut by another percentage point on Nov. 11, it said.
The step will release 61 billion rupees ($766 million) into the financial markets, the statement said, citing Governor Shamshad Akhtar.

"This is a temporary measure aimed at accommodating extraordinary liquidity requirements of the banking system,'' Akthar was cited in the statement as saying.

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