SBP To Announce Monetary Policy On Tuesday
Muhammad Irfan Published January 25, 2020 | 04:15 PM
As the central bank is going to announce the monetary policy on January 28 (Tuesday) the All Pakistan Business Forum has demanded a considerable reduction in discount rate, bringing it to a single digit, with a view to provide access of low-cost borrowing to the cash-starved private sector
Islamabad (UrduPoint / Pakistan Point News - 25th January, 2020) As the central bank is going to announce the monetary policy on January 28 (Tuesday) the All Pakistan Business Forum has demanded a considerable reduction in discount rate, bringing it to a single digit, with a view to provide access of low-cost borrowing to the cash-starved private sector.APBF President Syed Maaz Mahmood stated the Monetary Policy Committee of the SBP will meet on 28th Jan for deliberations on economic indicators to take a decision on key policy rate and it is expected that the SBP will keep the policy rate unchanged.He said that in the last monetary policy announcement the SBP kept the interest rate unchanged at 13.25 %, creating hardships in access to finance for the business community as a whole and for SMEs in particular.
He said that the cost of doing business and cost of production have shot up to the level of un-competitiveness. Under this, the cost of borrowing is huge and capital financing become more expensive.Although, there is significant improvement on external account side and the country's foreign exchange reserves are gradually increasing, yet the govt tight monetary policy is not understandable, he added.Syed Maaz Mahmood said that the State Bank approach toward monetary policy had been rather conservative and is based on its own analysis of the situation.
The continued tight monetary policy in the past has paid some dividends in reviving economic and financial stability but in view of the latest internal and external development, the SBP approach from now onwards should be beneficial to both the businessmen and the general public.
The government must come up with concrete policies to reduce rampant corruption in state-owned organisations, eradicate poverty and unemployment. He urged the governor SBP to review all other economy related banking policies and facilitate the private sector that was engine of the growth.He stated that cut in discount rate in monetary policy will spur the economic activities.
He said that reduction in interest rates cuts cost of production, strengthens debt repayment ability and improves the credit worthiness. This encourages businessmen to make investment in the productive activities, increasing the wealth of the nation.Syed Maaz Mahmood observed that such initiatives also result in job creation, leading to increased employment opportunities.
Such financing helps businessmen enhance their working capital and better manage their inventory, he added.The State Bank in its recent report had projected that, inflation pressures are expected to recede in the second half of the fiscal year (FY20), in light of a continued softness in domestic demand, which is expected to keep core inflation in check, and stability in the exchange rate on the back of improving current account deficit and financial inflows.Previously, the SBP jacked up the policy rate by 100 bps in July 2019 to 13.25 percent, the highest level since October 2011.
Since July 2019, the committee has kept the policy rate unchanged at this level.
Related Topics
Recent Stories
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 27 April 2024
Today Gold Rate in Pakistan 27 April 2024
HEC reviews curricula for environmental sciences degree programme
ICC Asia looking forward to an action-packed Asia Cricket Week
Yuvraj Singh named ICC Men’s T20 World Cup 2024 Ambassador
Greece hands Olympic flame to 2024 Paris Games hosts
Two Kyiv hospitals evacuating over feared Russian strikes
World must act on neurotech revolution, say experts
Charles & Catherine's cancer diagnoses
Champions Alcaraz and Sabalenka through in Madrid Open
King Charles to resume some public duties during cancer treatment: palace
US defense chief announces $6 bn in security aid for Ukraine
More Stories From Business
-
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 27 April 2024
46 minutes ago -
Today Gold Rate in Pakistan 27 April 2024
1 hour ago -
Finance minister reviews progress on FBR digitalization
11 hours ago -
US stocks rebound on tech earnings, London hits new record
11 hours ago -
US approves gene therapy treatment for hemophilia
10 hours ago -
KATI president for inclusion of agri sector in tax net
10 hours ago
-
Ahsan chairs 13th CPEC-JCC preparatory meeting, reviews arrangements for high-level delegation’s v ..
12 hours ago -
Police to take every step for security of business community: IGP
12 hours ago -
WB director, Planning minister discuss reforms in development projects
12 hours ago -
IP rights crucial in achieving SDG : Jam Kamal
14 hours ago -
FBR’s data protection efforts commended by OECD assessment team
14 hours ago -
US stocks rebound on tech earnings, London hits new record
14 hours ago