ERUM ZAIDI KARACHI - The central governments borrowing from the banking system for budgetary support has increased to Rs401 billion during July-January FY11 from Rs148 billion in the same period last year. From July 01 until January 8, 2010, overall governments sector borrowing to finance deficit financing surged to Rs347.3 billion while the inflationary borrowings from the central bank also stood higher at Rs154b, compared with Rs23 billion during the equivalent months of past fiscal year. According to provisional data released by SBPs on monetary aggregates, scheduled banks, as on January 8, 2010, lent Rs247 billion to the federal and provincial governments and their agencies including AJK government to meet budgetary requirements and commodity operations. The federal govt borrowed Rs196b as against of Rs35 billion from year earlier. Similarly, the provincial governments borrowed Rs42 billion, out of total Rs196 billion govts sector borrowing. SBP report showed that banking system financed Rs57billion to the central and provincial govts for commodity operations in the period under review. Net foreign assets of the banking system declined to Rs130 billion from Rs41b while net domestic assets up Rs367 billion from Rs234b The M2 growth was increased to 8.59 per cent over the same period last year. Expansion in the private sector credit growth was witnessed during July-January 2010-11 as it soared to Rs123 billion compared to the credit of Rs86 billion.