Munich Personal RePEc Archive

Seigniorage Earnings of Commercial Banks and State Bank of Pakistan

Arby, Muhammad Farooq (2006): Seigniorage Earnings of Commercial Banks and State Bank of Pakistan. Published in: Journal of the Institute of Bankers Pakistan , Vol. Vol 73, No. No 2, (April 2006)

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Abstract

The paper reviews the trend of seigniorage earnings by State Bank of Pakistan and commercial banks. It is found that seigniorage revenue of the SBP has declined overtime which indicates autonomy of the central bank as well as less reliance of the government on SBP’s resources for budget financing. In general, a direct relationship has been observed between seigniorage and inflation in Pakistan. However, at the two extremes of very high or very low inflation an inverse relation is detected.

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