Govt proposes absolute autonomy for SBP

[Kabira]

The federal government has agreed to grant absolute autonomy to the State Bank of Pakistan (SBP), whereas the federal cabinet will take up the SBP Amendment Bill for approval in its meeting today.

According to a report by the Express Tribune, the central bank’s primary objective under the SBP Amendment Bill, 2021, would be to ensure domestic price stability as it would be free from the responsibilities of supporting economic growth and providing budgetary loans to revive the stalled International Monetary Fund (IMF) programme.

The bill states that supporting economic policies has been declared as “tertiary objective” of the central bank, while the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) cannot investigate the SBP governor, deputy governors, its executives and board and committee members.

Former officials have also been provided with immunity from NAB and the FIA.

Similarly in another major proposal, the Monetary and Fiscal Policies Coordination Board has been proposed to be abolished, with a view to ending “risk of undue political influence over the SBP’s monetary policy”, according to the finance ministry. The

The bill also proposes the abolition of SBP’s powers to run quasi fiscal operations.

Commenting on the development, Bank of Punjab President and CEO Zafar Masud said, “Some of the clauses are an absolute must. IMF or no IMF.”

Taking to Twitter, he said “This should be done for all PSEs”.

Govt proposes absolute autonomy for SBP

The federal government has agreed to grant absolute autonomy to the State Bank of Pakistan (SBP), whereas the federal cabinet will take up the SBP Amendment Bill for approval in its meeting today.

profit.pakistantoday.com.pk

 

[blueazure]

aka, , the state bank will now work for IMF and would be 'free' from govt ' interference '


everyone has a boss...!

 

[RealNapster]

aka, , the state bank will now work for IMF and would be 'free' from govt ' interference '


everyone has a boss...!

Abay Yaar..... Have a look. RBI, US treasury etc all are autonomous. Modi govt was even criticising RBI because RBI was not loaning money to government for politically motivated schemes. Saari dunya me Jo chal Raha hota wo sahe hota, jaisy he wo cheez Pakistan me aajati Hy fatway aana shuru ho jaty.

 

[TheSnakeEatingMarkhur]

The federal government has agreed to grant absolute autonomy to the State Bank of Pakistan (SBP), whereas the federal cabinet will take up the SBP Amendment Bill for approval in its meeting today.

According to a report by the Express Tribune, the central bank’s primary objective under the SBP Amendment Bill, 2021, would be to ensure domestic price stability as it would be free from the responsibilities of supporting economic growth and providing budgetary loans to revive the stalled International Monetary Fund (IMF) programme.

The bill states that supporting economic policies has been declared as “tertiary objective” of the central bank, while the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) cannot investigate the SBP governor, deputy governors, its executives and board and committee members.

Former officials have also been provided with immunity from NAB and the FIA.

Similarly in another major proposal, the Monetary and Fiscal Policies Coordination Board has been proposed to be abolished, with a view to ending “risk of undue political influence over the SBP’s monetary policy”, according to the finance ministry. The

The bill also proposes the abolition of SBP’s powers to run quasi fiscal operations.

Commenting on the development, Bank of Punjab President and CEO Zafar Masud said, “Some of the clauses are an absolute must. IMF or no IMF.”

Taking to Twitter, he said “This should be done for all PSEs”.

Govt proposes absolute autonomy for SBP

The federal government has agreed to grant absolute autonomy to the State Bank of Pakistan (SBP), whereas the federal cabinet will take up the SBP Amendment Bill for approval in its meeting today.

profit.pakistantoday.com.pk

Notes pe ads lagao PKR ki value barhe gi
Idea was presented by Azad Chaiwala

 

[blueazure]

Abay Yaar..... Have a look. RBI, US treasury etc all are autonomous. Modi govt was even criticising RBI because RBI was not loaning money to government for politically motivated schemes. Saari dunya me Jo chal Raha hota wo sahe hota, jaisy he wo cheez Pakistan me aajati Hy fatway aana shuru ho jaty.

autonomous = aka free from any audit


------------

how much gold does SBP hold in its vaults to back pkr ?

 

[Patriot forever]

The federal government has agreed to grant absolute autonomy to the State Bank of Pakistan (SBP), whereas the federal cabinet will take up the SBP Amendment Bill for approval in its meeting today.

According to a report by the Express Tribune, the central bank’s primary objective under the SBP Amendment Bill, 2021, would be to ensure domestic price stability as it would be free from the responsibilities of supporting economic growth and providing budgetary loans to revive the stalled International Monetary Fund (IMF) programme.

The bill states that supporting economic policies has been declared as “tertiary objective” of the central bank, while the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) cannot investigate the SBP governor, deputy governors, its executives and board and committee members.

Former officials have also been provided with immunity from NAB and the FIA.

Similarly in another major proposal, the Monetary and Fiscal Policies Coordination Board has been proposed to be abolished, with a view to ending “risk of undue political influence over the SBP’s monetary policy”, according to the finance ministry. The

The bill also proposes the abolition of SBP’s powers to run quasi fiscal operations.

Commenting on the development, Bank of Punjab President and CEO Zafar Masud said, “Some of the clauses are an absolute must. IMF or no IMF.”

Taking to Twitter, he said “This should be done for all PSEs”.

Govt proposes absolute autonomy for SBP

The federal government has agreed to grant absolute autonomy to the State Bank of Pakistan (SBP), whereas the federal cabinet will take up the SBP Amendment Bill for approval in its meeting today.

profit.pakistantoday.com.pk

Absolutely huge.

Government can no longer force SBP to artificially manipulate currency. Government can no longer spend uncontrollably, fiscal discipline has to be maintained. Government can no longer interfere with the monitory policy, interest rates etc etc.

A must watch video.

These kind of interferences are the reason why we end up with IMF in the first place, always at the brink of default.

 

[H!TchHiker]

Handing over to IMF....in other words

 

[niaz]

The current Governor of SBP will not be in his position forever. Granting absolute autonomy to SBP does mean handing it over to IMF.

It simply means that the political gov't will not be able to manipulate the statistics or SBP policies for political mileage and the data coming out of the SBP would reflect the true state of the economy at all times.

 

[Patriot forever]

Handing over to IMF....in other words

Had we done this before, we would not ended with IMF in the first place. You are seeing everything upside down.
How hard is it for people to understand that artificially influencing economy has led to this boom and bust cycle, how many times have we ended up with IMF?
The real IMF agents are the ones who artificially manipulated the whole country economy to get political benefits.

 

[AgNoStiC MuSliM]

aka, , the state bank will now work for IMF and would be 'free' from govt ' interference '


everyone has a boss...!

I'm hearing this a lot, but keep in mind the scope of the SBP will also be limited under these proposals to focus on 'domestic price stability' (i.e inflation).

The SBP will have a limited role in formulating economic policies outside of that. Primary focus on inflation would mean setting interest rates etc, so hardly, in my view, something that the 'IMF could use to run Pakistan's economy'.

Others with a better economics background can correct me on this.

Handing over to IMF....in other words

Please see my previous post. How is it being 'handed over to the IMF'?

It's not like elected governments have not used and abused the SBP for their own short term policies while creating long term issues.

Under the proposals the SBP would focus more on inflation and setting interest rates - how is that 'being handed over to the IMF'?

 

[Sugarcane]

Is there any example that making an institution independent proven good in Pakistan?

Courts, NAB, ECP comes to mind given absolute autonomy and they are pain in a$$

 

[GumNaam]

bad idea..."autonomous" institutions have a way of going full retard in Pakistan.

 

[Abdulrehman 2978]

Lol people are funny here. Did you even watch the press conference? Well I did. And half of "journalists" literally asked the same questions as you guys which caused laughing there. SBP leadership will be answerable and accountable to National assembly and Senate. SBP will be given a job to stop inflation from increasing. And if they fail They will be questioned. This happens in most developes countries. This step should be taken regardless of what IMF says. In previous government SBP was used to fund personal shopping lists of sharif(beghairat) family and zardari family and artificially manatain rupee value. Now it will be given a true duty of controlling Inflation.

 

[Abdulrehman 2978]

Is there any example that making an institution independent proven good in Pakistan?

Courts, NAB, ECP comes to mind given absolute autonomy and they are pain in a$$

NAB, courts etc have been controlled by governments for decades. Current government has made them "independent" but it will take time to see affects as these institutions are still filled with friends of PMLN and PPP

 

[Patriot forever]

The current Governor of SBP will not be in his position forever. Granting absolute autonomy to SBP does mean handing it over to IMF.

It simply means that the political gov't will not be able to manipulate the statistics or SBP policies for political mileage and the data coming out of the SBP would reflect the true state of the economy at all times.

Sir you answered your 1st point in your 2nd point brilliantly.
It was political leadership decisions that ended us with IMF in the first place, this cycle has to stop.

IMF is not going to be here forever either.

Taking out artificial manipulation from the system will ensure slow but reliable growth. Also in the long term will ensure we don't end up with IMF again. (The situation we are in, we have practically stemmed the bleed but our high debt payments might require an another IMF program, to unlock cheap financing).

I'm hearing this a lot, but keep in mind the scope of the SBP will also be limited under these proposals to focus on 'domestic price stability' (i.e inflation).

The SBP will have a limited role in formulating economic policies outside of that. Primary focus on inflation would mean setting interest rates etc, so hardly, in my view, something that the 'IMF could use to run Pakistan's economy'.

Others with a better economics background can correct me on this.

Please see my previous post. How is it being 'handed over to the IMF'?

It's not like elected governments have not used and abused the SBP for their own short term policies while creating long term issues.

Under the proposals the SBP would focus more on inflation and setting interest rates - how is that 'being handed over to the IMF'?

The term supporting economic growth in this pretext is used for 'government financing' for example monetary injection in the market on behalf of government development schemes etc etc. Practically means better government debt management.

SBP is free to initiate schemes such as TERF. The targeted schemes such as these have a calculated downstream risk.

We need to understand SBP when controlling inflation, to my understanding it is a balance between monetary injection and interest rate. Not just the interest rate alone. It's a cycle.

SBP is functioning autonomous for a while now, it's just bringing in legislation.

For anyone who is worried about interest rate, must listen to SBP forward guidance. The initial increase in interest rate was to prevent run away inflation in backdrop of bringing rupee to free float.

Anyone is welcome to correct me if I am wrong.