April 17, 2020 (MLN): April The State Bank of Pakistan (SBP) has decided to reduce the Special Cash Reserve Requirement from 15% to 10% of total FE-25 deposits effective from April 20, 2020.

Accord to a circular issued by the Central Bank, all conventional banks/DFIs will be required to maintain Cash Reserves in US$ equivalent of their total FE-25 deposits on daily basis with SBP in the following manner:

1. 5% Cash Reserve Account (US$)
2. 10% Special Cash Reserve Account (US$)

According to data available on SBP's website, total amount of FE-25 Deposits as of Mar 2020 were USD 7.492 Billion, a reduction of 5% would make USD 375 million available to financial institutions which would have a positive impact for the market.

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