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SBP monetary policy

Pak. Economy: Cautious monetary policy in an uncertain environment

Almost 550 basis points have been already added to the discount rate in a 
period of 18 months. The rationale on the basis of which these points were added were there, although, with lower intensity, but the tolerance level of the 
economy was not such which can afford another addition to the current discount rate

By Zafar-ul-Hassan Almas

The most optimistic expectation of the Monetary Policy Statement (MPS) issued in the end of January 2009 was keeping the discount rate unchanged at its current level of 15 per cent. Almost 550 basis points have been already added to the discount rate in a period of 18 months.Read More »Pak. Economy: Cautious monetary policy in an uncertain environment

SBP monetary policy statement: risks and challenges: outlook for second-half-fiscal year 2009

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Recent Economic Environment and Emerging Challenges: Th e impact of global financial crisis varies across countries.

1. Global financial crisis that has been brewing for over 18 months has deepened. From being a small sector problem, the crisis has widened with US and Europe ‘s financial sectors experiencing acute liquidity crunch and falling stock prices. In the last two months, the financial crisis magnified and surfaced as an insolvency crisis as evident from the collapse of large global finance houses, which had to be restructured. Given the size and dimension of the problem, the advanced countries have provided a fiscal and monetary stimulus to rescue the financial system. Central banks of major economies including the US Federal Reserve, Bank of England, and the European Central Bank stepped up their interventions infusing liquidity in the system, structuring bailout package for financial institutions with provisions for capital injections, interest rate cuts, lending and deposit guarantees, etc.Read More »SBP monetary policy statement: risks and challenges: outlook for second-half-fiscal year 2009