Business

SBP’s Monetary Policy Committee to meet on Nov 25

Published

1 year ago

Farwa

The State Bank of Pakistan will announce its new monetary policy on November 25.
The Monetary Policy Committee will meet on Friday at SBP Karachi.
Last month, the SBP decided to leave its key interest rate unchanged at 15% for the next seven weeks.

KARACHI: The State Bank of Pakistan (SBP) will announce its new monetary policy after a meeting of the Monetary Policy Committee (MPC) on Friday.

In a statement, the central bank says, “The Monetary Policy Committee of SBP will meet on November 25 at SBP Karachi to decide about the Monetary Policy. Later on, SBP will issue the Monetary Policy Statement through a press release on the same day.”

SBP leaves interest rate unchanged

Last month, the SBP had decided to leave its key interest rate unchanged at 15% for the next seven weeks.

“The committee was of the view that based on currently available information, the existing monetary policy stance strikes an appropriate balance between managing inflation and maintaining growth in the wake of the floods,” the central bank in a thread shared on Twitter.

The MPC meeting was the first after the start of SBP Governor Jameel Ahmad and Finance Minister Ishaq Dar assumed charge.

The decision to maintain a status quo was in line with Dar’s old recipe of running a controlled economy, under which he would like to have an easy monetary policy.

The SBP hds increased the rate by a cumulative 800 basis points in 11 months (September 2021 to July 2022) to 15%.

The interest rate and flexible rupee-dollar parity are the two major tools available to central banks all over the world to control inflation readings and give direction to the economic trajectory in their respective countries.

Monetary and inflation outlook

The MPC stated that in line with slowing economic activity, private sector credit has seen a net retirement of Rs 0.7 billion so far this fiscal year, compared to an expansion of Rs 62.6 billion during the same period last year.

“This decline in credit mainly reflects a retirement of working capital loans and a sharp fall in consumer finance,” the statement read.

The SBP said that looking ahead, the supply shock to food prices from the floods is expected to put additional pressure on headline inflation in the coming months.

Nevertheless, headline inflation is still projected to gradually decline through the rest of the fiscal year, particularly in the second half.

Thereafter, it should fall towards the upper range of the 5-7% medium-term target by the end of the fiscal year 2023-24.

A continuation of prudent monetary policy and orderly movements in the rupee should help contain core inflation going forward. At the same time, curbing food inflation through administrative measures to resolve supply-chain bottlenecks and any necessary imports should be a high priority, the central bank noted.

In line with the above-mentioned factors, the MPC will continue to carefully monitor developments affecting medium-term prospects for inflation, financial stability, and growth.

Business

FBR Reforms: PM Leading Reforms Process with Law Minister as Top Priority

Published

5 hours ago

Farwa

According to Federal Law Minister Azam Nazir Tarar, Prime Minister Shehbaz is leading the entire reform process, and the Federal Government has made the reforms at the Federal Board of Revenue its top priority.

According to the law minister, who was speaking at a press conference in Islamabad, there are presently one billion rupees worth of tax cases pending in court. The parliament has for the first time passed legislation on tax tribunals in an effort to streamline and accelerate the legal process.

He stated that, strictly according to merit, there have already been a few postings and transfers in the FBR and that more are anticipated in the next few days.

Federal Information Minister Atta Tarar, who accompanied the Law Minister, stated that Prime Minister Shehbaz Sharif is spearheading an effective foreign policy through productive meetings with world leaders.

He declared the premier’s trip to Saudi Arabia, where Shehbaz Sharif met with government representatives and corporate executives who indicated interest in investing in Pakistan, a success.

Atta Tarar also declared that a commercial team from Saudi Arabia would be visiting soon.

Business

Pakistan will host an IMF team in May to discuss a new loan.

Published

5 hours ago

Farwa

According to sources, negotiations on a fresh loan program have been set between Pakistan and the foreign lender. There will be two stages to the meetings: technical discussions and policy-level conversations.

Prior to the upcoming negotiations, Pakistan must overcome formidable economic obstacles, including the collapse of an IMF-proposed tax amnesty program.

Although it hasn’t worked, the federal government had promised to include 3.1 million merchants in the scheme’s tax net. The recent turnover of senior officials has placed the Federal Board of Revenue (FBR) in an atypical position.

The negotiation process with the IMF will be difficult for the new and inexperienced FBR team. The significant drop in FBR’s tax collections would likely worry the IMF.

A day prior, Pakistan obtained the eagerly awaited $1.1 billion last installment from the IMF as a component of the $3 billion standby agreement.

Special Drawing Rights (SDR) 828 million, or $1.1 billion in worth, were given to the SBP “after the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA),” according to the SBP.

Finance Minister Muhammad Aurangzeb stated Islamabad might obtain a staff-level agreement on the new program by early July. Pakistan is seeking a new, longer-term, and larger IMF loan.

Although Aurangzeb has neglected to specify the specific program in question, Islamabad has stated that it is seeking a loan for a minimum of three years in order to support macroeconomic stability and carry out long-overdue and difficult structural reforms. Should it be approved, Pakistan would receive its 24th IMF bailout.

Business

In FY2024, SRB tax revenue soars to Rs 185.2 billion.

Published

6 hours ago

Farwa

In a statement released here, the SRB’s chairman, Wasif Memon, stated that he briefed Sindh Chief Minister Syed Murad Ali Shah about the organization’s revenue collections during their meeting.

In comparison, the tax collection during the same period of the previous financial year 2022–2023 stood at Rs143.3 billion. This achievement represents a 29 percent year-over-year growth, according to the Sindh Revenue Board (SRB), which recorded record revenue of Rs185.2 billion during the first nine months of the fiscal year 2023–2024.

The CM stated at the time that the SRB has shown tenacity and efficiency in revenue collection in spite of facing a number of difficulties, including the general economic downturn.

According to the statement, SRB’s monthly tax collection for April 2024 was Rs18.8 billion, a 23 percent increase from the Rs15.2 billion collected in the same month the previous year.