Pakistan keeps interest rate unchanged

“The State Bank is aware of the delicate balance that needs to be struck between risks to inflation and economic growth,” said the State Bank governor. – File Photo

KARACHI: Pakistan’s central bank on Saturday kept its benchmark interest rate unchanged at 14 percent, while asking the government to spell out a clear and coherent strategy for the economy.

The governor of the State Bank also blamed government lending for adding to the country’s rising inflation, which has been exacerbated by a huge floods.

Govt has crossed borrowing limit, say senators

A recent briefing given to a Senate panel by the State Bank clearly indicated that borrowing had gone up to about 64 per cent of the GDP. - File Photo

ISLAMABAD: The government has crossed the borrowing limit prescribed under the Fiscal Responsibility and Debt Limitation Act, 2005.

During the question hour in the Senate on Friday, Senators Haroon Akhtar and Prof Khursheed Ahmed said that under the law, the public debt must not exceed 60 per cent of the GDP. But a recent briefing given to a Senate panel by the State Bank clearly indicated that borrowing had gone up to about 64 per cent of the GDP.

The law requires the government to seek an approval from the parliament if it wants to exceed the limit on account of unforeseen expenditure warranted by a calamity or a national security issue.

SBP raises rate to rein in inflation

SBP hiked its key policy rate by 50bps for the third time in a row to stem runaway inflation and blamed govt for hampering the bank’s efforts to contain excessive monetary expansion. – File Photo

LAHORE, Nov 29: The State Bank of Pakistan (SBP) hiked on Monday its key policy rate by 50bps for the third time in a row to stem runaway inflation and blamed the government’s inflationary budgetary borrowings from it for hampering the bank’s efforts to contain excessive monetary expansion. 

The bank has raised discount rate by 150bps during the current financial year to 14 per cent since the end of July to control inflation.

Pakistan’s central bank sells 48 bln rupees of T-bills

The State Bank of Pakistan sold 48 billion rupees ($558.7 million) of treasury bills. — File Photo

KARACHI: Pakistan's central bank sold 48 billion rupees ($558.7 million) of treasury bills on Thursday under seven day repo contract at 11.70 per cent to mop up liquidity from the money market.

Forex reserves dip to $16.88bn

KARACHI: Pakistan’s foreign exchange reserves slipped to $16.88 billion on regular debt payments by the week ended on October 22, the central bank said on Thursday.

The foreign exchange reserves held by the State Bank of Pakistan (SBP) declined to $13.09 billion while those held by other commercial banks came down to $3.79 billion, it said.

SBP’s gloomy report brings KSE down

KARACHI: The Karachi share market ended lower on Tuesday following the central bank’s forecast of lower economic growth and higher fiscal deficit, dealers said.

“Selling activity was witnessed†in the overbought market as the State Bank of Pakistan report indicated fiscal deficit rising to 6.3 percent of GDP in FY10 and GDP growth falling to 2-3 percent,” said Ahsan Mehanti, a director at Arif Habib Investments.

SBP Annual Report 2009/10

KARACHI: The State Bank of Pakistan (SBP) has said that floods incurred immense losses to the economy and estimated the GDP growth in FY11 (July-June) to be in the range of two to three percent against the government target of 4.5 percent.

The central bank in its annual report FY10, released on Monday, said that the estimates for FY11 are based on the incomplete information on flood losses.

Govt borrowings climbed to Rs10,200 bn: SBP

 

 

KARACHI: Government borrowings doubled during 2007 to 2010 and surged to the level of Rs10,200 billion at the end of the last financial year 2009-10, said the State Bank of Pakistan in its Economic Review for the previous financial year.

It said that the amount borrowed by the Government climbed to 10,200 as on June 30, 2010.

The Review said cited increase in financial deficit as the prime reason for the rise in government borrowings. The government borrowings stand at 69.5 per cent of the GDP.

SBP lowers growth forecast for FY10-11

KARACHI: State Bank of Pakistan (SBP) lowered its gross domestic product growth forecast to be between 2 percent and 3 percent for the 2010/11 fiscal year (July-June), following the devastating floods in August.

Before the floods, the government's target was 4.5 percent.

SBP modifies procedure to prepare financial statements

KARACHI: The State Bank of Pakistan (SBP) on Tuesday modified procedures for banks and development financial institutions to prepare their financial statements as per the revised international accounting standards (IAS-I).

“While preparing quarterly, half-yearly and annual financial statements as required under the BSD Circular No 02, dated May 12, 2004 and the BSD Circular No 04, dated February 17, 2006, following approaches would be adopted for the financial statement prepared with effect from June 30, 2010,” said the State Bank in a circular issued here.

C/A deficit narrows by 68pc in 9 months

KARACHI: The current account deficit kept supporting the traditionally weak external imbalances of the country as the deficit fell by 68 per cent at the end of third quarter of the current fiscal.

The State Bank reported on Monday that the current account deficit at the end of July-March 2009-10 was $2.702 billion. It was vastly against the massive deficit of $8.379 billion during the same period last year.

SBP amends guidelines for freight forwarders

KARACHI: The State Bank of Pakistan (SBP) on Wednesday amended its guidelines for freight forwarders, which some exporters claim, give rise to the theft of export consignments.

Now name of the actual owner of the goods will appear in trade documents along with that of freight forwarder, transferring goods from the producer to the buyer, a circular issued by the central bank said.

SBP limits maximum financing to Rs1bn

The State Bank of Pakistan (SBP) on Monday restricted, with immediate effect, maximum financing limit to Rs1 billion for a single export-oriented project under the Long-Term Financing Facility, according to a statement issued here on Monday.

The decision was taken in view of growing demand, diversify financing and risk, besides accommodating large number of borrowers, the statement said. Since the initiation of Long-Term Financing Facility in 2008, introduced to facilitate export growth, there was no bar on the maximum financing limit for a single borrower.

SBP working on Sharia compliant short-term securities

KARACHI: The State Bank of Pakistan (SBP), Governor Syed Salim Raza, on Wednesday said that the central bank is working with the industry and the federal government to develop Shariah compliant short-term securities that will be issued on regular basis.

He was speaking on the occasion of a talk on ‘Current Islamic Banking Paradigm and the Way Forward’ by Dr. Umer Chapra, a renowned international scholar on Islamic Economics and Finance at SBP.

Suspicious transactions

Banks/DFIs directed to provide information to LEAs

KARACHI: The State Bank of Pakistan (SBP) on Tuesday directed banks and Development Finance Institutions (DFIs) to provide timely information related to suspicious transactions to the law enforcement agencies (LEAs).

“The central bank advice to banks/DFIs to provide timely information to LEAs would reduce money-laundering cases in the country,” said Syed Irfan Ali, director, Banking Policy and Regulation Department of the SBP.

Prospects for agri sector gloomy: SBP

KARACHI: Growth prospects for the agriculture sector remains gloomy in the wake of a fall in the production of rice and sugarcane and expected decline in wheat harvest in coming months, the SBP said in its report.

According to SBP estimates, the production of rice and sugarcane dropped 8.3 per cent and 2.8 per cent to 6.4 million tons and 48.6 million tons in Kharif 2010, respectively.

SBP Quarterly Report on State of Pakistan’s Economy

War on terror, lower revenue collection widen fiscal deficit GDP target unchanged at 3.5pc, current account deficit narrows, inflation bounces back

KARACHI: The State Bank of Pakistan (SBP) has raised the fiscal deficit forecast for the current financial year 2009/10 (July-June) to between 5.0 and 5.5 per cent of the gross domestic product (GDP) from the targeted 4.9 per cent in the wake of high defence spending and low revenue collection.

SBP keeps interest rate unchanged at 12.5pc

KARACHI: The State Bank kept the interest rate unchanged for two months on Saturday in the wake of reappearance of rising inflationary pressure, forcing the central bank to declare 12 per cent inflation for the current fiscal year.

“An upward adjustment in the interest rate, at this juncture, runs the risk of impeding the still nascent recovery, while a downward adjustment runs the risk of fuelling an already high inflation. Hence the SBP has decided to keep the policy rate unchanged at 12.5 per cent,” said the SBP monetary policy review.

SBP urged to pay drawback of local taxes

KARACHI: Exporters face acute liquidity crunch as huge amount of drawback of local taxes is pending against a large number of claims filed with the State Bank.
The ministry of textile industry in its five-year textile policy last September allowed drawback on local taxes and levies to the value-added textile sector to provide them a space in ever-rising cost of doing business.

SBP cuts mark-up on textile loans

KARACHI: The State Bank has decided to provide cheaper money to the textile sector as being extended to exporters under Export Finance Scheme (EFS).
The SBP on Monday announced a mechanism in consultation with the ministry of textile industry, under which the eligible borrowers of the textile sector will be provided mark-up rate facility under the SBP EFS and the mark-up rate support against long-term loans availed from banks and development financial institutions (DFIs).