Friday, September 13 2024

Privatisation myth
BEYOND sensational late-night arrests of opposition MNAs, impunity for abductors and unending intrigue, there is a remarkable degree of continuity and consistency in how the Pakistani ruling class rules. Working people and ethnic peripheries are of secondary importance to all who occupy the corridors of power; their primary concern is to appease big creditors and foreign investors. Which is why former finance minister Ishaq Dar’s unveiled dig at the IMF is somewhat amusing. Let’s be honest: all bourgeois parties seek only to secure a share of the piece in the debt-ridden, militarised structure of power, so much so that policymaking is akin to farce. Whoever is in the seat of government reproduces the same tired economic policy prescriptions. There is no bigger example of this than the privatisation mantra.
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Monetary easing
CONTINUING ongoing monetary easing, the State Bank has slashed its key policy rate by 200bps from 19.5pc to 17.5pc for the third time since June. Cumulatively, the bank has sliced the interest rates by 450bps from the decade-high of 22pc in three months. The fresh reduction in the borrowing costs shows the central bank’s confidence over recent economic stability amid hopes that the IMF Board would approve the new loan programme by the end of this month. The rate cut was widely anticipated amid a sharp drop in headline inflation to a single digit in August, and growth in the delta between the current CPI reading and the SBP’s policy rate to 10 percentage points. The surprise in the policy decision was the quantum of the rate reduction. The bank said its decision was informed by the sharp fall in both headline and core inflation. The faster disinflation, resulting from a delay in the implementation of the planned increase in the administered domestic energy prices, as well as the decline in global oil and food prices has somewhat exceeded SBP expectations.
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IMF board to discuss Pakistan’s programme on Sept 25: spokesperson
The International Monetary Fund (IMF) on Thursday confirmed that the Fund’s board will meet on September 25 to discuss the $7 billion Extended Fund Facility (EFF) to Pakistan. Pakistan expected to secure a deal with the Fund in August after the lender approved the 37-month programme agreed upon in July. The country also raised its tax revenue target by a record 40 per cent and hiked energy prices to meet the global lender’s demands. The country also completed its previous $3 billion loan programme in April and secured a credit rating upgrade from both Moody’s Ratings and Fitch Ratings late last month. Addressing a press briefing today, IMF’s spokesperson Julie Kozack said that the Fund had reached a staff-level agreement with Pakistan on the EFF in July.
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SCO ministers unite to counter protectionism, strengthen trade
The Shanghai Cooperation Organisation (SCO) trade ministers on Thursday underscored the need to counter protectionist trade measures and called for the strengthening of a non-discriminatory, World Trade Organisation-based multilateral trading system. The 23rd ministerial meeting saw the endorsement of three major initiatives — launched by Pakistan, Kazakhstan and Russia — to foster deeper cooperation among member countries. Representatives from seven nations gathered in Islamabad, with Belarus welcomed as a new member of the SCO. The Indian vice-minister of commerce and industry, along with Kazakhstan’s vice-minister of national economy, attended the conference virtually. Other countries represented by ministers or deputy ministers included Tajikistan, Uzbekistan, Belarus, Iran, the Kyrgyz Republic, China and Russia.
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Forex reserves rise by $30m
The foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $30 million to $9.466 billion during the week ended on Sept 6, announced the central bank on Thursday without disclosing the source of this inflow. The SBP governor said on Thursday that the reserves are projected to reach $12bn by March and $13bn by June next year. The SBP has been buying dollars regularly from the interbank market to improve its reserves and make payments for debt servicing. The country’s total foreign exchange reserves reached $14.79bn, including $5.33bn curently held by the commercial banks.
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