Record increase in demand for currency notes despite digitization
Demand for currency notes has risen sharply, despite the government’s efforts to bring the undocumented economy on record and promote digitization under the FATA guidelines. Officials at Security Papers Limited, which makes paper for currency notes, revealed in a corporate briefing this week that the company has made record profits this year after paying taxes. Security Papers made a profit of Rs 1.27 billion in the financial year 2019-20, which is 65.3% more than the previous financial year. The company’s gross profit gross profit stood at 1.89, up 19.6 percent year-on-year.
According to Asjad Hussain, an analyst at Taurus Securities, the profit of Security Papers Limited is due to a record increase in revenue, which stood at Rs 4.9 billion in the financial year 2019-20, which was 22.5 per cent higher than the previous financial year. Economist Qaisar Bengali said that when the government faces a budget deficit, it covers its expenses by printing new currency notes. Under the terms of the IMF, the government cannot borrow from the SBP, now the government has borrowed from private banks, which has led to the printing of new currency notes. He added that government loans are also the reason for printing new currency notes as this is the only way for the government to repay the loans.