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PM Khan announces two new schemes for overseas Pakistanis



PM Khan announces two new schemes for overseas Pakistanis

https://nation.com.pk/NewsSource/web-desk
Web Desk
April 29, 2021


Prime Minister Imran Khan on Thursday announced two new schemes for overseas Pakistanis who have Roshan Digital Accounts (RDA).

In an event held here at the capital, the premier thanked Governor State Bank Reza Baqir for his role in bringing about the two schemes; Roshan Apni Car and Roshan Samaji Khidmat.

PM Imran Khan instructed the government to seek Finance Minister Shaukat Tareen's help, saying that the minister was an expert in when it came to the marketing aspect of products and assets.

The premier urged his economic team to keep thinking of "out-of-the-box" solutions to support Pakistan's economy till its exports does not come at par with its imports.

He appreciated the record-breaking rise in remittances from overseas Pakistanis over the years, adding that this was just the "tip of the iceberg".

He praised the Pakistani diaspora for playing their part in supporting Pakistan's economy over the years.

"Overseas Pakistanis have, over the years, kept our economy afloat," he said, adding that he was in touch with overseas Pakistanis for the past 50 years during his cricketing days.

In a message to Pakistani embassies in various countries across the world, PM Imran Khan said their "most important duty" is to look after the affairs of Pakistani labourers in those countries.


 

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Mar 21, 2007
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Written by The Frontier Post

KARACHI: Meeting of the Board of Directors of the NBP “the Bank” was held to approve the financial statements of the Bank for the three-months period ended March 31, 2021. The Bank has delivered strong financial results, demonstrating resilience of its business model and efforts of its workforce in serving the Nation and working with the Government towards swift economic recovery in the country.

For the quarter ended March 31, 2021, the Bank declared a profit before tax of PKR 12.6 bn; whereas profit after tax closed at PKR 7.7 bn, 87% up, YoY. The Bank’s earnings per share increased from PKR 1.94 in Q1 ‘20 to PKR 3.62 in Q1 ‘21. Net profit translates into after-tax Return on Average Assets and Return on Average Equity at 1.0% and 15.7%, up from 0.5% and 10.0% in Q1 ‘20, respectively.

Given the significant drop in the policy rate as compared to the same period last year, gross mark-up/interest income was PKR 48.5 bn being 33.2% lower, YoY. Likewise, the interest/mark-up expense also dropped by 52.0% at PKR 26.9 bn.

Consequently, net interest/mark-up income of the Bank stood at PKR 21.6 bn, i.e. 30.3% higher, YoY. Despite the subdued economic activity during the year, non-mark-up / non-interest earning of the Bank closed 2.4% higher at PKR 8.5 bn (Mar ‘20: PKR 8.3 bn). Accordingly, total revenue of the Bank was 21.0% up YoY at PKR 30.1 bn (Mar ‘20: PKR 24.9 bn). Administrative expenses remained controlled and recorded a marginal increase of 3.8% YoY to close at PKR 14.3 bn. Cost-to-income ratio of the Bank improved to 47.7% from 55.5% in Q1 ‘20. During the year, NPLs of the Bank increased by 6.6% to close at PKR 182.5 bn (Dec’20 : PKR 171.3 bn).
Proactively moving from ‘incurred’ to ‘expected’ credit loss model, the Bank created provision charge of PKR 3.11 bn to make its balance sheet more resilient in the prevailing circumstances.
On the balance sheet side, the Bank’s capital discipline has improved its Common Equity Tier 1 capital ratio to 16.50% (Dec’20 :14.99%) and Total Capital Adequacy Ratio to 21.91% (Dec’20:19.78%). This capital position enables the Bank to absorb shocks in the foreseeable future and leverage emerging opportunities to create value for its shareholders.

The Bank’s liquidity and net stable funding ratios improved to 156% and 256%, respectively. Net Assets at end March ‘21 stood at PKR 269.8 bn, translating into break-up value per share at Rs. 126.8, which is 30% up from Rs. 97.2 at end 2018. The Bank’s end of year total assets closed at PKR 3,340.3 bn i.e. 11.0% higher than PKR 3,008.5 bn level of the year end 2020.

The Board’s efforts and strategy has recently been focussed upon strengthening the Bank’s balance sheet, inducting a team of professionals with the required expertise, developing effective framework of policies and controls to protect the Bank, and building a corporate culture based on performance and accountability. Material progress has been made in each of these key areas. In recent years, the Bank has continued to retain earnings and over 2019 and 2020 these retained earnings amount to PKR 46.4 bn.

Over and above this, after identifying and dimensioning the contingencies facing the Bank, provisions for a total of around PKR 60.0 bn were created over the same period to cover potential portfolio losses, significant HR related exposures and operational vulnerabilities. Thus, the Bank’s balance sheet has been reinforced considerably by about PKR 100 bn during last two years.

The Bank is executing a post-crisis recovery strategy to continue playing its systemically important role in the economy, while also maintaining a strong and resilient balance sheet to deliver performance for shareholders. For the year 2021 & beyond, the Bank’s business strategy will continue to focus on financing and supporting underserved sectors including SME, Microfinance, Agriculture Finance and the PM’s Low-Cost Housing initiative on a priority basis.
 

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Savings and insurance: Karandaaz offering grants for digital financial services


by The Frontier Post





ISLAMABAD: Karandaaz Pakistan is accepting applications from commercial banks, branchless banks, PSO/PSPs, Fintechs, non-banking financial institutions and entities that primarily focus on the excluded segments of the population, to apply for grants to scale up their pilots that generate new financial use-cases for digital channels.

Two categories that have been defined for this set of grants are savings and insurance. In savings, pilots that are testing the use-case generation in term deposits, periodic returns, and rotating savings and credit association (ROSCA), locally known as committee system will be focused. In insurance, pilots that are geared to improve adoption of health, life, assets, and travel insurances through digital financial channels will be considered.

Karandaaz under its strategy for 2020-2024 is building and supporting models and solutions for the financial inclusion of the unbanked and underbanked population through private sector engagement. In addition to empowering those who do not have an account, this underbanked population must be targeted with pilots that introduce financial deepening.

Ali Sarfraz, CEO Karandaaz said, “Karandaaz collaborates across the ecosystem to maximize impact through improved access to digital finance for low income, rural, and otherwise excluded population segments, especially women. We work with all stakeholders to facilitate the digitization of government and other payment streams as well as provide support for innovation in the realm of digital financial services that originate from the private sector. To this end, Karandaaz runs multiple programs that contribute to a holistic impact on the ecosystem. It is crucial to extend support for innovations that are likely to create sustainable social impact as far as financial inclusion is concerned, but are often limited in terms of resources.

This pilot to scale program was specifically designed to support such innovative ideas.”

Rehan Akhtar, Chief Digital Officer Karandaaz said, “We are looking for pilots that are intended to make a difference through identification of consumer adoption strategy, digitization of information flow, incentives adoption, technically develop systems and products, test new use cases, test multiple consumer interfaces and activate on-ground adoption of a saving or insurance solution. We are hopeful that these grants for scaling up innovative pilots will help increase the product portfolio of mobile wallets, specifically with insurance and savings products and re-invent existing un-conventional digital financial services for these two categories.”

Despite increased uptake of digital channels for financial services in the last 12 years in Pakistan, research and data shows that the users have a low-value perception of such services. Identifying and communicating a compelling value proposition to consumers is vital for increasing use-cases. Understanding the nuances of how consumers of different segments earn, save, and spend their money can help providers develop relevant value propositions for each segment.

This pilot to scale grants from Karandaaz will help create value propositions that resonate with the end-users under the categories of savings and insurance and broadening as well as normalizing everyday usage of digital financial services and products for these functions.
 

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SBP hopes to boost investment in Pakistan: Raza Baqir

  • As the third wave continues to disrupt economies worldwide, Pakistan’s economy has a lot going on in its favour this time, according to the Dr. Raza Baqir, Governor of the State Bank of Pakistan (SBP) in an online session with Nest I/O.
  • Dr. Raza Baqir explained how the country’s demographic profile, growing mobile penetration rate, and positive economic indicators, especially during the COVID-19 pandemic, have contributed to an increase in investments.
Kashaf Ali
01 May 2021


https://www.facebook.com/sharer/sha...er.com/news/40089417&display=popup&ref=plugin



As the third wave continues to disrupt economies worldwide, Pakistan’s economy has a lot going on in its favour this time, according to the Dr. Raza Baqir, Governor of the State Bank of Pakistan (SBP) in an online session with Nest I/O.

P@SHA’s tech incubator, Nest I/O, hosted a 60-minute Fireside Chat on ‘SBP and Startups’ with Dr. Raza Baqir on key reforms that the SBP has instituted to ease investment and growth in the startup ecosystem. Fawzia Naqvi, who is an Advisor on Impact Investments, and Legal Practitioner Mubariz Siddiqui also joined Dr. Baqir to discuss the impact of these SBP policy changes on startups in Pakistan.

Officially launched in January, 2015, the Nest I/O has now evolved from just an incubator to a community hub half a decade later. Nest I/O is home to almost 200 startups now and continues to support thousands of entrepreneurs, students and professionals, providing them a space to experiment with new ideas and be innovative.

Over the past few years, Pakistan’s startup sector has grown exponentially with investment activity heating up and gaining momentum due to favourable government policies. Early Stage investment activity has also shown a lot of promise. According to the i2i Accelerator data research, Pakistani startups raised 19.3 million and closed 13 deals in the first quarter of 2021. Moreover, investments worth 18.85 million approximately came from international investors with e-commerce raising the most funding, followed by fintechs.

During the online session with Nest I/O, Dr. Raza Baqir explained how the country’s demographic profile, growing mobile penetration rate, and positive economic indicators, especially during the COVID-19 pandemic, have contributed to an increase in investments.
“Pakistan, being the world’s 5th largest country right now, is too big a market to ignore,” says Dr. Raza Baqir. “It is a market full of young people. The demographic profile of Pakistan is one which favours the growth of new industries and especially, startups, which cater to a young population,” he adds.
In addition to this, Dr. Baqir also mentioned that the growing mobile penetration in Pakistan offers a very opportune market for anybody who is considering investing in Pakistan.

He also explained that a combination of factors such as elimination of the current account deficit through an institutional reform, and growth in reserves from 7 billion approximately in june 2019 to 16 billion gross reserves are all positive indicators for foreign investors to invest in the Pakistani economy. In addition to this, these signs also give more confidence to regulators like SBP to ease a lot of the restrictions that existed before.

According to the SBP Governor, most of the recent SBP measures have also been focused on long term results rather than just the short term benefits that they have been able to achieve so far.

In response to Fawzia Naqvi’s question on how Pakistan’s economy might be affected by the third wave, Dr. Baqir explained that the country is entering the third wave with much better economic fundamentals as compared to its economic condition during the first wave.

The country’s financial indicators have also improved as foreign reserves have grown, the exchange rates system has survived the test of COVID, and the stock has also demonstrated a great deal of momentum.
Dr. Baqir elaborated that “Pakistan’s economy has a lot more going on in its favour in this wave of covid than the previous wave and we are ready to take any and all measures. We are more confident this time around.”

He added that the SBP was able to offer new policy measures in the first wave, which the industry has appreciated such as concessional financing for companies who would commit to not lay off workers, payroll rozgar financing scheme, healthcare financing for the establishment of covid treatment facilities (with financing as low at zero percent); all of which saved 1-2 million jobs in the process.
 

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SBP asks banks to rationalise loan fee

Applicants applying for housing loans are being charged exorbitant processing fee


Salman Siddiqui
May 01, 2021


KARACHI: Pakistan’s central bank has taken notice of exorbitant application processing fee charged by commercial banks and development finance institutions (DFIs) for the much-hyped government’s subsidised loans for low-cost housing.

It has also observed that financial institutions are unduly delaying the processing of applications.

The State Bank of Pakistan (SBP) has directed the banks and DFIs to improve their behaviour towards customers and asked them to issue an e-tracking code to each applicant so they could check the status of their applications and know whether it has been approved or rejected.

“SBP is receiving a number of complaints regarding delayed processing, long turnaround time and no mechanism to track the financing application after submission,” the central bank said in a circular on Friday.

It has also been observed that complaints lodged on State Bank’s complaint portal remain pending with banks for unduly long times, stated the circular titled “Measures to be Adopted to Improve Visibility of Government Markup Subsidy Scheme (G-MSS) for Housing Finance”.

The G-MSS is also known as Mera Pakistan Mera Ghar Housing Finance Scheme.

“Banks/ DFIs are advised to adopt appropriate measures to resolve complaints in a timely manner.”

“Furthermore, potential borrowers under G-MSS have complained about exorbitant processing charges,” it said.

“Accordingly, banks/DFIs are advised to review and rationalise their processing fee for financing considering their actual costs and provide breakup of these charges to the applicants at the time of receipt of applications.”

Banks/DFIs are advised to immediately start providing receipt to the applicants with a unique tracking number against each housing finance application.

Meanwhile, banks/DFIs are also advised to set up, within 30 days from the issuance of the circular (dated April 30, 2021), an online e-tracking mechanism and a phone-based helpline to provide the status and expected time required for decision on an application on the query of the applicant.

They are also advised to record and convey reasons behind the rejection of housing finance application to the applicant in a simple and clear manner and devise a system to monitor 30 days of turnaround time (TAT) for decision on the applications received.

Moreover, banks/ DFIs are asked to direct the branch officials, through training and alignment of systems and procedures, to perform initial scrutiny and inform customers about missing requirements/documents at the time of submission of an application.

According to the circular, they are also liable to conduct rigorous training of branch officials to enhance their knowledge of G-MSS and improve their behavior towards customers and conduct capacity building of call centre officials to adequately address queries of customers.

“Policy for designation of focal person for State Bank complaint portal must be reviewed and it should be ensured that at least one focal person is present in each region to handle the complaints,” it said.

In order to increase prospects of applicants to avail housing finance under G-MSS, banks/DFIs are advised to guide the applicants regarding the options of 100% clubbing of income of up to four co-applicants and enhancing their credit worthiness through third-party guarantee.

As of April 20, 2021, banks had received applications for financing of more than Rs52 billion from the general public under the scheme (G-MSS). Of these, banks approved financing of over Rs15 billion while the remaining applications were at different stages of evaluation and approval process, the central bank said the other day.
 

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Rebalancing the sources of forex inflows


Mohiuddin Aazim
May 3, 2021


Higher external debt servicing is itself an outcome of previously accumulated external debt and further debt accumulation increases future debt servicing obligations. — AFP/File



Higher external debt servicing is itself an outcome of previously accumulated external debt and further debt accumulation increases future debt servicing obligations. — AFP/File


In less than eight months, forex inflows through Roshan Digital Accounts (RDA) of overseas Pakistanis crossed a billion dollars mark on April 23. These accounts are attractive enough to continue to bring into Pakistan huge sums of foreign exchange every month — overseas Pakistanis can use these accounts to invest in rupee and foreign currency-denominated Naya Pakistan Certificates (NPCs) and earn intoxicating returns. They also have the choice to invest in NPCs in both conventional and Shariah-compliant forms.

On three-month NPCs, the annualised return is 5.5 per cent in dollars, 5.25pc in pound sterling, 4.75pc in euros and 9.50pc in rupees depending upon the currency of choice for investment. Returns on six-month, one-year, three-year and five-year NPCS are equally attractive — especially on foreign currency denominated NPCs.

This is reason number one for the meteoric rise in forex inflows through RDA. Bankers say that the bulk of $1bn funds received so far have ended up investments in NPCs. Another reason is that the rupee equivalent of forex funds in RDA can be invested into real estate, the stock market and mutual funds as well.

NPCs intoxicating returns is reason number one for the meteoric rise in forex inflows through Roshan Digital Accounts
A surge in total forex inflows in RDA — from $9 million in September 2020 when the scheme was launched to $1bn now — is really commendable. It has helped Pakistan increase the availability of foreign exchange at a crucial time when forex spending on external debt servicing and imports is high, exports are growing too slowly and foreign investment inflows are low.

But is it enough? What about foreign direct investment? Don’t we need it as much as we need forex inflows coming via RDA? In nine months of this fiscal year, net foreign direct investment (FDI) inflows totaled about $1.4bn, down 35pc from $2.1bn in the same period of the last year. And, since this is but a reflection of the ongoing declining trend in FDI inflows the world over, there is a need for some extra efforts to make Pakistan a desirable destination of FDI, particularly in the now-booming health and technology sectors.

In its Jan 2021 report, the United Nations Conference on Trade and Investment (UNCTAD) said it “expects any increase in global FDI in 2021 to come not from new investment in productive assets but through cross border M&As (mergers and acquisitions) especially in technology and healthcare.” The UNCTAD report noted that amidst a general declining trend in FDI in 2020,

India and Turkey were attracting a record number of deals in IT-consulting and digital sectors including e-commerce platforms, data processing services and digital payments. With some increase in policy focus, Pakistan too can attract FDI into digital and healthcare sectors as the pandemic has made these sectors very strong candidates for both local and foreign investment.

On 3-month NPCs, the annualised return is 5.5pc in dollars, 5.25pc in pounds, 4.75pc in euros and 9.50pc in rupees
In the overall balance of payments, or BOP, each category of forex inflow/ outflow has its own dynamics and serves unique purposes. Compensating a fall in exports or low export growth — and fixing a higher trade deficit with remittances — cannot provide a lasting solution to the problem of expanding trade deficit. Similarly, further accumulation of external debt is not the logical response to the challenge of increasing the requirement of external debt servicing.

Higher external debt servicing is itself an outcome of previously accumulated external debt and further debt accumulation increases future debt servicing obligations.

For a forex-starved country like Pakistan, it is important to keep external debt servicing requirement low by all means including via a slower pace of accumulation of fresh debts.

Contrary to its electoral promises, the PTI government has accumulated lots of fresh external debts. And Prime Minister Imran Khan justifies it by saying that he has inherited a huge stock of external debt with increasing debt servicing requirement.

The stock of the federal government’s external debt, excluding the IMF’s loan for BOP support, in rupee terms stood around Rs7.942 trillion in August 2018 when Mr Khan became the prime minister. After 30 months, in Feb 2021, this stock grew to Rs11.832 trillion showing a net fresh accumulation of Rs3.89 trillion, the State Bank of Pakistan (SBP) stats show. Isn’t such fast-paced external borrowing —Rs129.66bn a month — imprudent?

What apparently necessitated such heavy external borrowing was that exports during these 30 months remained sluggish and foreign direct investment also remained lesser than required.

Heavy foreign portfolio investment in government debt securities came in temporarily when the interest rates were high but predictably flew out when the rates came down.

Throughout this period, inflows of remittances remained strong, especially after the launch of RDA and due to the stronger crackdown against illegal transfer of funds. That is commendable.

But RDA-routed foreign funds for investment in Pakistan can be repatriated fully and easily without needing prior permission from the SBP. This means the government will have to continue to offer very high returns on foreign currency denominated Naya Pakistan Certificates to retain investment in them. Going forward, paying lavish returns in foreign currency in these certificates may become a problem when foreign currency investment in them reaches new staggering heights.

Clearly, the government needs to focus on right-balancing the sources of forex inflows. Tapping forex investment and remittances potential of 11m overseas Pakistanis is good. But the government must also move to attract more foreign direct investment into the country.

A country of Pakistan’s size should not be content with $1.5bn or $2bn FDI a year. It must aspire for and do whatever is required to be done to attract $5bn or $6bn FDI a year. Taking FDI to that height — without losing policy focus on remittance’ and exports’ growth is necessary to avoid an unmanageable accumulation of fresh foreign debts.

That requires more pragmatic, elaborate and forward-looking economic policies and a more investment-friendly and stable political environment. Political stability, however, is missing. Sadly, there are no signs of its early return.


Published in Dawn, The Business and Finance Weekly, May 3rd, 2021
 

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State Bank gives Rs36bn financing for renewable energy adoption

Shahid Iqbal
May 5, 2021


KARACHI: The State Bank of Pakistan (SBP) has been providing financing on a large scale to promote renewable energy that helped Unilever Pakistan run its 30 per cent plants on renewable energy, central bank governor Dr Reza Baqir said on Tuesday.

Addressing a joint webinar hosted by the SBP and Unilever Pakistan to create awareness about the former’s Financing Scheme for Renewable Energy (FSRE), Dr Baqir said that as of February 2021, financing of around Rs36 billion has been extended for 521 projects producing approximately 850MW.

Financing for sustainable development is the need of the hour and financial institutions have a crucial role in this area, he added.

FSRE aims to encourage investments for clean energy in Pakistan, the SBP governor said, adding that this is part of the country’s efforts to diversify the energy mix and reduce climate change impact.

The scheme offers varied financing options ranging from Rs400 million to Rs6 billion for a range of entities and persons, he said.

This includes captive energy units as well as commercial projects and individual consumers who may share excess production with the national grid.

The SBP issued its FSRE in 2016 and based on positive feedback the scheme was revised in July 2019. The SBP also introduced a Sharia-compliant version of this scheme in August 2019. The scheme aims at meeting Pakistan’s growing electricity demand through renewable energy and promoting clean energy projects as part of Sustainable Development Goals (SDGs).

It promotes the use of indigenous resources such as wind, solar and hydro power to generate electricity as well as encourages the use of renewable energy at consumer level.

Dr Baqir said that Pakistan faces challenge as a result of climate change and adopting prevention strategies are of paramount importance. In this regard the SBP has issued FSRE with a view to promoting renewable energy projects.

He highlighted the key features of the scheme that can be beneficial for the stakeholders ranging from the corporate to the individuals. The scheme has evolved over time and received strong response, said Dr Baqir urging participants to benefit from this facility.

He said that mobilisation of financial resources towards resource efficient and sustainable avenues would play a central role in mitigating climate change. Pakistan is member of Global Sustainable Banking Network (SBN) since 2015 and green and sustainable finance policies are being aligned with global environmental and social standards and best practice.

In his address, Chairman & CEO Unilever Pakistan Amir Paracha said FSRE offered tremendous social and business value to companies and producers both in terms of their environmental footprint and cost savings ambitions.

As part of this financing scheme, Unilever availed a loan of Rs833m through Standard Chartered Bank to set up 8.85MW of renewable energy production facilities across four factories in Punjab.

This effort is in line with Unilever’s global mission for carbon neutrality and sustainability in its manufacturing process. Unilever has committed to remove carbon emissions from operations by 2030, as well as net zero emissions from their products by 2039, which will be 11 years ahead of the 2050 Paris Agreement.

The webinar was attended by various chambers, media organisations, presidents and CEOs of banks, energy experts, representatives of Pakistan Business Council and senior officials from the SBP.

Published in Dawn, May 5th, 2021
 

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World Bank approves $1.3 billion for projects in Pakistan.

Makhdum Khusro Bakhtyar, Minister of Economic Affairs, was present today at the Ministry of Economic Affairs for the signing of several project agreements totaling $1,336 million, including a $128 million grant from the World Bank.

The government's initiatives in Social Safety, Disaster and Climate Risk Management, Developing Infrastructure for Resilience, Agriculture and Food Security, Human Capital Growth, and Governance will all benefit from this funding.

The minister thanked the World Bank's Country Management for its unwavering support for Pakistan's government in achieving long-term economic growth. This continued and increased support, he said, demonstrates the international financial institution's and development partners' confidence in the current government's progress and reforms.
 

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Pakistan shows appreciation for the suspension of $367 million in debt owed to Japan.

Pakistan and Japan signed debt suspension agreements worth $367 million under phase-1 of the G20 Debt Service Suspension Initiative (DSSI).
 

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SBP rolls out advance calendar of MPC meetings

  • It is pertinent to mention that a minimum of six MPC meetings are scheduled every year.
  • The SBP has lately taken a number of initiatives to modernize and increase transparency in the monetary policymaking process.


Ali Ahmed
20 May 2021




In a bid to improve the predictability and transparency of monetary policy formulations, the State Bank of Pakistan (SBP) on Thursday introduced the advance calendar of Monetary Policy Committee (MPC) meetings.

As per details, the central bank has decided to begin announcing a half-yearly schedule of MPC meetings on a rolling basis. In this regard, the dates for the next four meetings are as follows: May MPC meeting:

Friday, 28th May 2021; July MPC meeting: Tuesday, 27th July 2021; September MPC meeting: Monday, 20th September 2021; November MPC meeting: Friday, 26th November 2021.

SBP said that its latest step is in line with international best practices. “To manage expectations of economic agents, many central banks across the globe release the schedule of Monetary Policy Committee meetings in advance. This practice is consistent with the objective of reducing uncertainty around monetary policy decision making,” it said.

SBP was of the view that clear communication will aid in making the central banks more transparent, and thereby contributes to enhancing their accountability. “Central bank communication and transparency are also key for effective transmission of monetary policy decisions,” it said.

It is pertinent to mention that a minimum of six MPC meetings are scheduled every year. In addition, the MPC can convene emergency meetings during the intervening period, if required.

The SBP has lately taken a number of initiatives to modernize and increase transparency in the monetary policymaking process. Last year, SBP increase interactions with analysts, the media, various business forums, academics, and investors through regular briefing sessions with its senior management.

While in January, the MPC decided to provide forward guidance on monetary policy for the first time to facilitate policy predictability and decision-making by economic agents in wake of unpredictability caused by the coronavirus pandemic.
 

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Expert anticipates policy rate to remain unchanged in upcoming MPC

  • “We expect the central bank to keep policy rate unchanged at 7 percent in the upcoming monetary policy statement,” said Arif Habib Limited in a report.

Ali Ahmed
22 May 2021




Financial analyst expects no change in the policy rate in the upcoming Monetary Policy Committee (MPC) of State Bank of Pakistan (SBP) to be convened on Friday, May 28.

“We expect the central bank to keep policy rate unchanged at 7 percent in the upcoming monetary policy statement,” said Arif Habib Limited in a report.

Recalling the MPC convened in March 2021, the report noted that the improvement has been witnessed in the overall domestic recovery which has aided consumer and business confidence.

“Therefore in our view SBP might consider keeping the rate unchanged in order to boost the domestic demand despite running a negative interest rate of -2pc. Moreover, the statement also hinted at a very gradual and measured monetary tightening stance when the need arise. It also highlighted the core inflation continues to appear restraint and all the headline numbers have been interlining inflation remains manageable,” stated the report.

The report highlighted that inflation rate as per SBP is likely to remain within 5-7 percent range in the medium term. “Therefore it seems likely that the central bank would let the real interest rate remain negative in the medium term,” the report said.

The report also conducted a poll to evaluate feedback from the market regarding its expectations in the upcoming MPC. The market expects the State Bank of Pakistan to keep the policy rate unchanged at 7pc in the upcoming monetary policy.

“This result is widely expected as the government intends to boost the domestic demand they believe,” said the report.

89pc of the total respondents are of the view that the SBP will keep the policy rates unchanged in while 11pc of the total respondents anticipate a rate cut off 50-100 BPS in the MPC.
 

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PM Imran Khan Claims that PTI Govt has been paying back long term debt - this is again a reality and here are the SBP figures.

Public Debt Serviced

PTI ( 2.75 years) = 21.582B$
PMLN (5 Years) = 16.689B $
PPP (5 years) = 13.793 B$

This debt reservicing is a major hit to our foreign exchange reserves , this compounded our problems on the external side.

Total long term Debt Serviced (Public + Private)

PTI (2.75 years ) = 24.194 B$
PMLN (5 years) = 19.99 B$
PPP (5Years) = 16.774 B$
 

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KARACHI: The State Bank of Pakistan (SBP) on Saturday night said the provisional estimate for FY21 growth of 3.94 percent released by the National Accounts Committee (NAC) on Friday reflects the strong economic recovery underway since the beginning of this fiscal year, which has been highlighted in recent monetary policy statements and quarterly reports of the SBP.

SBP had raised its own growth forecast in March on the basis of buoyant economic activity reflected in different high frequency data.

This was done in an appropriately conservative manner while noting upside risks to growth. Data received since then, and discussed in the NAC, suggest these upside risks have materialized.

According to SBP, in some sections of the media, needless apprehensions are being cast about the deliberations that took place in the NAC on Friday and SBP‘s views.

These deliberations were routine and technical in nature and, as always, helped to clarify the basis for the provisional estimate. The estimate released was approved unanimously and has the full backing of the SBP.—PR

Copyright Business Recorder, 2021
 

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PSX sets new record of daily traded volume at 1.56 billion shares

Mettis News | Dawn.com
May 26, 2021




The capital markets remained positive throughout Wednesday's session as a variety of positive developments increased investors’ risk appetite. — AFP/File


The capital markets remained positive throughout Wednesday's session as a variety of positive developments increased investors’ risk appetite. — AFP


The Pakistan Stock Exchange (PSX) on Wednesday recorded an all-time high daily trading volume, with Planning Minister Asad Umar attributing the development to the market reacting to signs of sustained economic recovery.

The capital markets remained positive throughout today's session as a variety of positive developments increased investors’ risk appetite, registered by a record high traded turnover of 1.56 billion shares.
"New daily traded volume record set on the [PSX]. Today's volume exceeded previous record by 39 per cent," Umar tweeted.

He said it was reflective of the market reacting to "signs of sustained recovery" and "the successful containment of the Covid 3rd wave ... though risk still remains".
 

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Fitch Ratings predict better than expected growth for Pakistan’s economy in FY2022

Pakistan's growth is expected to stabilize at almost 4% in the coming fiscal year, with the current account deficit narrowing to 0.5 percent of GDP in FY21 from 1.7 percent in FY20, according to Fitch Ratings.

Domestic consumption, continued manufacturing, and improved construction activity are expected to keep the economy stable, as per a Fitch statement.

This comes after Fitch predicted a negative 0.5 percent growth rate for the current fiscal years
 

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