Monetary policy: SBP jacks up interest rate by 150 bps to 8.75%

In line with market expectations, the State Bank of Pakistan (SBP) on Friday announced an increase of 150 basis points in its benchmark policy rate in a bid to contain runaway inflation, which threatens to destabilise the economy.

The central bank had earlier brought forward its monetary policy review meeting in light of “recent unforeseen developments that have affected the outlook for inflation and the balance of payments.”

The central bank has said the decision to increase the interest rate to 8.75% has been taken because of risks related to inflation.

"With risks rotating from growth to inflation and the current account faster than expected, there is now a need to proceed faster to normalise monetary policy to counter inflation and preserve stability with growth," the statement said, adding that today’s rate increase is a material move in this direction.

In its forward guidance, the central bank said: "Looking ahead, the MPC re-iterated that the end goal of mildly positive real interest rates remains unchanged, and given today’s move, expects to take measured steps to that end."

The monetary policy committee at the central bank tightened interest rates keeping in view rising inflationary pressure due to rupee depreciation, a potential increase in utility tariffs and an upward trend in prices of petroleum products and essential food items in global markets.

During the day, the central bank also released current account data which posted a deficit of $1,663 million for the month of October 2021 compared to a surplus of $448 million in the same month of the last year.

Interest rates are used by the central bank as a tool to control inflation, regulate unnecessary movements in currency rates and give guidance to the national economy.

In its previous policy review, the central bank had increased the benchmark policy rate by 25 bps to 7.25%. Accordingly, the real interest rate (inflation reading subtracted from the benchmark interest rate) was recorded at negative 2%, as inflation reading came in at 9.2% in October.

In its pre-monetary policy commentary, Arif Habib Limited had stated that the SBP is expected to remain hawkish, raising its policy rate for the second time since the beginning of FY22 and at a much higher magnitude of 100bps — the highest hike in more than 2 years — taking the total cumulative increase in FY22 to date to 125 bps.

The brokerage house had predicted that a shift towards a more hawkish stance from am earlier “gradual and calibrated” one might be evident in this monetary policy meeting as inflation worries are rumbling more clearly than before.

Inflation in Pakistan has increased markedly with the resumption of economic activities but as supply-side inflation has subsided, demand-side inflation has overshot. Headline inflation initially remained low averaging at 8.7% during 4MFY22, but now, even with the base effect waning, it has started accelerating, raising concerns.

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Kulbhushan Jadhav bill not person-specific: Farogh Nasim

Law Minister Farogh Nasim Friday said that a bill passed by the joint sitting of Parliament related to Indian spy Kulbhushan Jadhav is not person-specific and said that it is a “national security” issue.

The minister made these comments in a press conference alongside MNA Maleeka Bokhari in response to the Opposition's claims that the PTI had given an NRO to the Indian spy.

Parliament had passed the International Court of Justice (Review and Re-consideration) Bill, 2020 on Thursday to provide for the right of review and reconsideration in the Kulbhushan Jadhav case in line with the judgment of the International Court of Justice.

The ICJ, in its July 2019 judgement, had made an observation that Pakistan was under an obligation to provide by means of its own choosing effective review and reconsideration of the conviction and sentence of Jadhav, so as to ensure that full weight was given to the effect of the violation of the rights set forth in Article 36 of the Vienna Convention, taking account of paragraphs 139, 145 and 146 of the judgment.

Clarifying the government’s view on the matter, Farogh Nasim urged the Opposition to consider Pakistan’s national security matters and not make it an issue.

“This is Pakistan’s red line. India would have gone to the ICJ and filed a contempt case against us. The Modi government could have also approached the UN Security Council had we not provided Kulbhshan right to review,” the minister added.

Farogh Nasim said the bill is not person-specific and would be applied to all those who fill the criteria.

Reacting to a statement made by an Opposition leader that the US does not accept the decisions of the ICJ, the minister said we Pakistan is not the US nor is the country a banana republic.

He asked the Opposition to not make this issue a “tool for politics”.

“Looks like you [Opposition] don't understand this thing. If you [Opposition] are doing this on purpose then this is a big problem,” Forough Naseem said.

The minister noted that with the passage of this bill, India’s dream to attack Pakistan has shattered. “We cut off India’s hands through this legislation.”

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Kulbhushan Jadhav bill not person-specific: Farogh Nasim

Law Minister Farogh Nasim Friday said that a bill passed by the joint sitting of Parliament related to Indian spy Kulbhushan Jadhav is not person-specific and said that it is a “national security” issue.

The minister made these comments in a press conference alongside MNA Maleeka Bokhari in response to the Opposition's claims that the PTI had given an NRO to the Indian spy.

Parliament had passed the International Court of Justice (Review and Re-consideration) Bill, 2020 on Thursday to provide for the right of review and reconsideration in the Kulbhushan Jadhav case in line with the judgment of the International Court of Justice.

The ICJ, in its July 2019 judgement, had made an observation that Pakistan was under an obligation to provide by means of its own choosing effective review and reconsideration of the conviction and sentence of Jadhav, so as to ensure that full weight was given to the effect of the violation of the rights set forth in Article 36 of the Vienna Convention, taking account of paragraphs 139, 145 and 146 of the judgment.

Clarifying the government’s view on the matter, Farogh Nasim urged the Opposition to consider Pakistan’s national security matters and not make it an issue.

“This is Pakistan’s red line. India would have gone to the ICJ and filed a contempt case against us. The Modi government could have also approached the UN Security Council had we not provided Kulbhshan right to review,” the minister added.

Farogh Nasim said the bill is not person-specific and would be applied to all those who fill the criteria.

Reacting to a statement made by an Opposition leader that the US does not accept the decisions of the ICJ, the minister said we Pakistan is not the US nor is the country a banana republic.

He asked the Opposition to not make this issue a “tool for politics”.

“Looks like you [Opposition] don't understand this thing. If you [Opposition] are doing this on purpose then this is a big problem,” Forough Naseem said.

The minister noted that with the passage of this bill, India’s dream to attack Pakistan has shattered. “We cut off India’s hands through this legislation.”

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South Africa's AB de Villiers announces retirement from all forms of cricket

Former South Africa international AB de Villiers said he has decided to retire from all forms of cricket, bringing to an end a 17-year career.

De Villiers had retired from all international formats in May 2018 but was in talks about a return to the limited-overs side for the Twenty20 World Cup before deciding against playing for the Proteas again.

The 37-year-old was still involved in franchise cricket, last playing the Indian Premier League for Bangalore.

"It has been an incredible journey, but I have decided to retire from all cricket," De Villiers said in a statement on Friday.

"Ever since the backyard matches with my older brothers, I have played the game with pure enjoyment and unbridled enthusiasm. Now, at the age of 37, that flame no longer burns so brightly.

"That's the reality I must accept — and, even if it may seem sudden, that is why I am making this announcement today. I've had my time. Cricket has been exceptionally kind to me."

An explosive batsman who also kept wickets, De Villiers has often been referred to as "Mr 360" for his wide range of shots that found all corners of the boundary.

De Villiers retires with over 20,000 runs to his name in Tests, one-day internationals and T20Is for South Africa.

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Senate passes journalist protection, NAB bills amid opposition's protest

The government managed to have several bills passed in the Upper House of the Parliament, the Senate, Friday despite protests from the Opposition lawmakers.

The Protection of Journalists and Media Professionals bill was introduced by Federal Minister for Information Dr Shireen Mazari. The bill was passed after 35 votes were given in favour of the bill while 29 voted against it.

An independent group led by Senator Dilawar Khan also supported the government in its bid to have the bill passed.

The Opposition protested against the government's move to include the bill as an additional item in today's agenda, as Opposition lawmakers shouted "Rubber Stamp Parliament unacceptable".

Federal Minister for Human Rights Dr Shireen Mazari said that it had taken the ministry one year to formulate the bill.

The Upper House also approved the NAB Amendment bill, which was presented by Federal Minister for Law Dr Farogh Naseem. "This bill is not being passed for a single person, rather, it is for everyone across the board," he said.

Minister of State for Parliamentary Affairs, Dr Ali Mohammad Khan, presented the Higher Education Commission (HEC) Amendment bill which was also approved by the Senate.

Senate Chairman Sadiq Sanjrani was forced to adjourn the session after Opposition lawmakers, incensed at the bills being approved, surrounded the Speaker's dias and tore copies of the day's agenda.

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Senate passes journalist protection, NAB bills amid opposition's protest

The government managed to have several bills passed in the Upper House of the Parliament, the Senate, Friday despite protests from the Opposition lawmakers.

The Protection of Journalists and Media Professionals bill was introduced by Federal Minister for Information Dr Shireen Mazari. The bill was passed after 35 votes were given in favour of the bill while 29 voted against it.

An independent group led by Senator Dilawar Khan also supported the government in its bid to have the bill passed.

The Opposition protested against the government's move to include the bill as an additional item in today's agenda, as Opposition lawmakers shouted "Rubber Stamp Parliament unacceptable".

Federal Minister for Human Rights Dr Shireen Mazari said that it had taken the ministry one year to formulate the bill.

The Upper House also approved the NAB Amendment bill, which was presented by Federal Minister for Law Dr Farogh Naseem. "This bill is not being passed for a single person, rather, it is for everyone across the board," he said.

Minister of State for Parliamentary Affairs, Dr Ali Mohammad Khan, presented the Higher Education Commission (HEC) Amendment bill which was also approved by the Senate.

Senate Chairman Sadiq Sanjrani was forced to adjourn the session after Opposition lawmakers, incensed at the bills being approved, surrounded the Speaker's dias and tore copies of the day's agenda.

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Baba Guru Nanak’s anniversary celebrations start in Nankana Sahib

The celebrations of the 552nd birth anniversary of Baba Guru Nanak have started in Nankana Sahib.Thousands of Sikh pilgrims from India and other countries are participating in the celebrations.

The main ceremony of the celebration will be held at Gurdwara Janamasthan in Nankana Sahib today.

Various departments have already completed necessary arrangements, including security, accommodation, food, healthcare and transport, to facilitate the Sikh pilgrims.

Federal Minister for Religious Affairs and Inter-faith Harmony Noor-ul-Haq Qadri, Federal Minister for Narcotics Control Ijaz Ahmed Shah, and Sikh leaders are also participating in the celebrations.

Pakistan has taken special measures for the Sikh community in connection with Baba Guru Nanak’s birthday.

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