Discount Rate Maintained at 12%

 

          State Bank of Pakistan (SBP) has stated that monetary policy is less effective in the current economic landscape and consequently has decided to maintain discount rate at 12% for the next two months

 

          The central bank has once again emphasized the need for fundamental restructuring of the economy.

 

          It was explicitly highlighted that total stock of government borrowing directly from SBP has swelled to PKR1,660bn – GoP has borrowed PKR414bn up till end May12. This is in negation to the SBP (Amendment) Act 2012 requiring government to maintain zero quarterly borrowing and retire the total stock in next seven years

 

          Although SBP is not expecting any sharp increase in inflation but is worried over its persistence at high levels; largely due to monetization

 

          The economic managers pointed towards fiscal authority and stated that reduction in reliance over banking system and retirement of borrowing from SBP without bringing structural reforms is not possible

 

Discount Rate Maintained at 12%