The State Bank increased the interest rate from 16 percent to 17 percent, which reached the highest level in 27 years. Governor State Bank Jameel Ahmed announced this while holding a press conference in Karachi. He said that the Monetary Policy Committee has decided to increase the interest rate by 100 basis points, after which the interest rate is being increased by one percent from 16 to 17 percent.
Governor State Bank said that there is a delay in new inflows which is increasing the pressure on the reserves, there is uncertainty for Pakistan due to global conditions and global conditions are affecting remittances and exports.
It should be noted that the interest rate has reached the highest level of 27 years, in 1997 the interest rate was 16.5%.
Governor State Bank said that it will be difficult to achieve the target of 2 percent growth rate of economic development, business conditions and import problems will affect the growth rate, large scale manufacturing is also under pressure, July December current account. The deficit stood at 3.7 billion dollars, the current account deficit is expected to be less than 10 billion dollars ie up to 9 billion dollars.
He said that a lot of loans have been repaid which affected the foreign exchange reserves, a one percent increase in the interest rate was inevitable to control inflation, the market base exchange rate is being followed, the parameters of the market are being followed. Rate changes.
The governor said that there is a tendency of speculation in the value of the rupee, the rate is high in the market due to the need for external financing and debt repayment, the completion of the IMF review and inflows will stabilize the value of the rupee.
He said that apart from exchange companies, if there is a foreign exchange transaction, it is illegal, action is being taken against those doing illegal foreign exchange business.
He said that the need for financing was 33 billion dollars, the current account deficit of 10 billion dollars was the external debt of 23 billion dollars, so far, out of the 23 billion loans, 15 billion dollars have been settled out of which 9 billion dollars have been settled. Dollars have been paid off and 6 billion has been rolled over, while in five months, 8 billion dollars of debt has to be paid and another 3 billion dollars will be rolled over.
He said that the financing limit of 2.2 billion dollars will be restored twice. After paying two billion dollars, they will pay another billion dollars in interest.
Governor State Bank said that prior approval of State Bank was necessary for imports, in some cases imports were made without approval of banks, stuck containers have become a major problem, details of shipments have been sought from trade bodies, etc. Clearance of imports made by obtaining capital or on deferred payments from the country, will also facilitate the remaining imports in the light of the details provided by the Chamber of Commerce.
He said that banks earned 100 billion rupees only during the period of July to September during high exchange rate fluctuations, I inspected 13 banks, investigations against banks have been completed, regulatory and fiscal disciplinary measures will be taken. Action will be taken against the banks that create money in dollar volatility.
Governor State Bank said that the reason for the decrease in exports is the conditions of the world markets, our problems are also affecting exports, priority is being given to the export sector for imports, 10 percent of the export earnings are kept in a special account for exporters. The limit has also been allowed to be used for imports.
He said that the real problems of IT export companies are also being solved, it has been made mandatory for the banks that 35% of the income of IT export should be transferred to the special account of the exporters, IT companies will be able to use their income more easily.
Governor State Bank said that a decrease in remittances was expected, the cash transfer of remittances was stopped due to lack of travel in Corona, now travelers are bringing cash remittances with them through the banking channel, due to rising unemployment abroad and inflation. Remittances have been affected, speculation and sand differences in the foreign exchange market are also affecting remittances.
He said that there is no restriction on sending education expenses abroad, education expenses can be sent at interbank rate.
Governor State Bank said that dependence on loans is an old problem, there is a need to adopt remittances, exports and other means to reduce imports, immediate financing will have to be done through loans, they have been focusing on reducing imports for six months.
He said that there is no restriction on foreign currency account, there is no restriction on withdrawal of foreign currency from foreign currency accounts, he instructed the banks to give dollars to the foreign currency account holders, if any bank does not have dollars, the State Bank will provide them. .
