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SBP hikes intertest rate by 150bps to 13.75pc

The Monetary Policy Committee emphasizes the urgency of strong and equitable fiscal consolidation to complement today’s monetary tightening actions

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SBP hikes intertest rate by 150bps to 13.75pc
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Karachi: The State Bank of Pakistan (SBP) enhanced the benchmark policy rate by 150 basis points to 13.75 per cent on Monday.

The intertest rate ahs been hiked to "keep inflation expectations anchored and contain risks to external stability".

In a statement issued by the central bank, the SBP's Monetary Policy Committee (MPC) said the move, along with fiscal consolidation, would help moderate demand to a sustainable pace.

The central bank had announced an increase of 250bps in the policy rate last month.

"Since last meeting, estimates suggest growth in FY22 has been much stronger than expected. Meanwhile external pressures remain elevated and inflation outlook deteriorated due to home-grown and international factors," it said in a series of tweets.

The economy could benefit from some cooling with the output gap now positive, the SBP said.

The MPC emphasized the urgency of strong and equitable fiscal consolidation to complement today’s monetary tightening actions. This would help alleviate pressures on inflation, market rates and the external account. 

According to the monetary policy statement, external pressures remain elevated and the inflation outlook has deteriorated due to both home-grown and international factors. 

"Domestically, an expansionary fiscal stance this year, exacerbated by the recent energy subsidy package, has fueled demand and lingering policy uncertainty has compounded pressures on the exchange rate," the committee noted.

Moreover, globally, inflation has intensified due to the Russia-Ukraine conflict and renewed supply disruptions caused by the new COVID wave in China. 

Consequently, the SBP noted that almost all central banks across the world are suddenly confronting multi-year high inflation and a challenging outlook.

"The MPC’s baseline outlook assumes continued engagement with the IMF, as well as reversal of fuel and electricity subsidies together with normalisation of the petroleum development levy (PDL) and GST taxes on fuel during FY23," the statement read. 

The SBP highlighted that under these assumptions, headline inflation is likely to increase temporarily and may remain elevated throughout the next fiscal year. 

"Thereafter, it is expected to fall to the 5-7% target range by the end of FY24, driven by fiscal consolidation, moderating growth, normalisation of global commodity prices, and beneficial base effects. 

"Considering the balance of risks around this baseline, the MPC felt it was important to take effective action to anchor inflation expectations and maintain external stability," it added.

The MPC during the meeting emphasised the urgency of strong and equitable fiscal consolidation to complement today’s monetary tightening actions. This would help alleviate pressures on inflation, market rates and the external account. 

 

 

Regional

PRA collects Rs168 bln in FY22, surpasses revised target of Rs165.5 bln

According to the spokesperson, the authority become the first provincial revenue collecting agency in the country to cross the psychological barrier of Rs150 billion

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PRA collects Rs168 bln in FY22, surpasses revised target of Rs165.5 bln

Lahore: The Punjab Revenue Authority (PRA) has surpassed the upward revised target of Rs165.5 billion for the financial year 2021-22.

According to provisional collection figures up to June 28, 2022, the PRA collection stands at Rs168 billion, which is 108 per cent of the set target of Rs155.9 billion and 101.5pc of the revised target.

According to the PRA spokesperson, the authority expects substantial revenue in the last two days of the financial year and is hoping to end the year close to Rs170 billion.

It is worth mentioning that earlier this year, PRA became the first provincial revenue collecting agency in the country to cross the psychological barrier of Rs150 billion and the collection in June has further established it as the leading Provincial revenue collecting agency in the country.

This is the third successive year in which PRA has surpassed its revenue collection target. Earlier the Authority collected more than the assigned targets of Rs.105 billion and Rs.125 billion in the financial years 2019-20 and 2020-21 respectively. 

PRA spokesperson further elaborated that this success has been achieved without resorting to any coercive actions such as sealing of premises, attachment of bank accounts or collection of advance payments.

PRA has relied completely on collaboration with all stakeholders and emphasis on taxpayer facilitation and education. More than 200 awareness workshops were held during the financial year with more than 2,000 participants. 

PRA expects the growth trend to continue in the coming years as its management and all workforce is committed to continuing its focus on compliance without resorting to any measures that adversely affect ease of doing business.

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Pakistan

Eidul Adha on July 10 as Zil Hajj moon not sighted in Pakistan

Central Ruet-e-Hilal Committee Chairman Maulana Syed Abdul Khabir Azad announced the decision following a meeting of the committee

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Eidul Adha on July 10 as Zil Hajj moon not sighted in Pakistan

The Central Ruet-e-Hilal Committee announced Wednesday that the Zil-Hajj moon has not been sighted in Pakistan, adding that Eid ul Adha in Pakistan will be observed on July 10 (Sunday).

Chairman Maulana Syed Abdul Khabir Azad announced the decision following a meeting of the committee, held in Karachi after Maghrib prayers to sight the crescent moon.

The first day of Zil hajj would fall on July 1 (Friday), he added.

In the meeting, it was formally announced by the committee that the moon of Zul-Hijjah has not been seen anywhere in the country, therefore Eid-ul-Adha will be on Sunday, July 10.

Earlier, the Lahore Zonal Committee had also announced that the moon of Dhi Al-Hajj has not been seen. Eid-ul-Adha will be on Sunday, July 10, however, the final announcement in this regard was to be made by the Central Route Hilal Committee.

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Sports

US Open champion Raducanu faces exit from Wimbledon

Emma Raducanu has struggled with a string of minor injuries since her sensational win at Flushing Meadows last year.

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US Open champion Raducanu faces exit from Wimbledon

US Open champion Emma Raducanu crashed out of Wimbledon on Wednesday, losing her second-round match against Caroline Garcia 6-3, 6-3 to the disappointment of the British home crowd.

The 10th seed, who was troubled by a side strain in the run-up to the Grand Slam, was broken five times in the match on Centre Court by her French opponent, ranked 55 in the world.

Raducanu, 19, was on the back foot early in the contest after being broken in her first service game and won just 45 percent of points on her first serve.

Garcia, fresh from winning on grass at Bad Homberg, hit 25 winners in an impressive display.

"Emma is a huge player and in her home tournament and she proved she can do very well on the big stage," said Garcia.

"I really enjoyed playing on Centre Court, it was my first time and very special."

Raducanu has struggled with a string of minor injuries since her sensational win at Flushing Meadows last year.

She has also come under scrutiny over her failure to settle on a long-term coach.

SOURCE: AFP

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