The Central Bank (CB) has lost Rs.24.2 billion in 2013. Down from profits of Rs.66.2 billion in 2012. But the bank had transferred 25 billion rupees by way of profits to the state budget. Central Bank Governor Nivard Cabraal said yesterday
Other than interest income from its forex assets, the CB primarily makes profits from inflation, either through currency depreciation or interest from ‘domestic assets.’
Domestic assets are government securities, which tend to grow sharply when large volumes of money are printed usually to bridge the deficit or keep interest rates down, generating high inflation and balance of payment crises.
Lower Central Bank profits generally point to lower inflation in the economy he said.
Interest income from domestic assets therefore, also plunged to Rs 11.4 billion from Rs. 25.9 billion a year earlier as the CB sold its Treasury bills portfolio as the banking system recovered from balances of payments h troubles of 2011 and 2012 he added
~NEWS~
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