ISLAMABAD: In the wake of growing criticism, the Prime Minister Imran Khan-led government of the Pakistan Tehreek-e-Insaf (PTI) government has called a meeting of Monetary and Fiscal Policies Coordination Board (MFPCB) on Wednesday to convince the State Bank of Pakistan (SBP) to reduce the policy rate, a local newspaper has reported.
Following the programme of the International Monetary Fund (IMF), the central bank has maintained a tight monetary policy and has kept the discount rate at 13.25 percent for the last many months. Independent economists opine that current higher monetary rate is unjustified in the current scenario since the economy is showing improvement.
According to the report, all federal ministries, being part of MFPCB will recommend to the SBP to cute the policy rate by 50 basis points in its next monetary policy due next month.
On the other hand, State Bank of Pakistan (SBP) Governor Reza Baqir recently said that the current tight monetary policy stance is appropriate to help ease crippling inflation rates in the months to come. He further said inflation had risen due to depreciation of the rupee, increases in utility prices and one-off factors related to temporary food supply chain disruptions. Reza stressed that economic policies are addressing previously accumulated external and fiscal sector imbalances.