KARACHI: After keeping it unchanged for almost 15 months, Pakistan’s central bank on Monday raised the policy rate by 25 basis points to 7.25 percent, hoping to slow down growth in the current account deficit due to an unexpectedly faster pace of economic recovery.
The State Bank of Pakistan (SBP) had drastically cut the key rate from 13.25 percent to 7 percent between March 17, 2020 and June 25, 2020, to support the COVID-hit economy.
“At this more mature stage of the recovery, a greater emphasis is needed on ensuring the appropriate policy mix to protect the longevity of growth, keep inflation expectations anchored, and slow the growth in the current account deficit,” the SBP said in statement after a meeting of its Monetary Policy Committee (MPC).
Since its last meeting in July, the MPC noted that the pace of economic recovery had exceeded expectations. This robust recovery in domestic demand, coupled with higher international commodity prices, was leading to a strong pick-up in imports and a rise in the current account deficit.
Pakistan’s current account deficit from July to August was recorded at $2.3 billion as compared to a surplus of $838 million during the same period last year.
The central bank said over the last few months, the burden of adjusting to the rising current account deficit had fallen primarily on the exchange rate and it was appropriate for other adjustment tools, including interest rates, to also play their due role.
It said year-on-year inflation had declined since June but rising demand pressures together with higher imported inflation could begin to manifest in inflation readings later this fiscal year.
The SBP said economic recovery now appeared less vulnerable to pandemic-related uncertainty given growing signs that the latest COVID-19 wave in Pakistan had been contained and there is continued progress in the national vaccination campaign and overall management of the pandemic by the government.
The stance of monetary policy was still appropriately supportive of growth, with real interest rates remaining negative on a forward-looking basis, the bank said.
In the absence of unforeseen circumstances, the MPC expected the monetary policy to remain accommodative in the near term, with possible further gradual tapering of stimulus to achieve mildly positive real interest rates over time, the bank said.
Growth in Fiscal Year 2021-22 was now expected to move toward the upper end of the forecast range of 4-5 percent, notwithstanding some greater uncertainty with respect to spillovers from the evolving situation in Afghanistan.
In a report on Monday, Fitch Solutions, a US-based firm that provides credit risk and strategy solutions, predicted the Pakistani economy would grow by 4.2 percent in FY22, up from 3.9 percent in FY21.
It said the risk to growth outlook on the domestic front would be from the delta strain of the coronavirus, while on the external front heightened security threats posed by radical groups, such as the Pakistani Taliban, could lead to social instability and destruction of infrastructure.
“This might weigh on the country’s gross fixed capital outlook and exporting capabilities as businesses become hesitant to invest in capacity-building infrastructure,” the firm said in its statement on Monday.
Pakistan’s central bank said its policy committee felt some macro prudential tightening of consumer finance might also be appropriate to moderate demand growth as part of the move toward gradually normalizing monetary conditions.
The MPC would continue to carefully monitor developments affecting medium-term prospects for inflation, financial stability and growth and was ready to respond appropriately, it added.
Pakistan raises policy rate to 7.25% in bid to slow growth in current account deficit
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Pakistan raises policy rate to 7.25% in bid to slow growth in current account deficit
- The central bank maintained the key rate for almost 15 months to support economic recovery
- Says robust recovery in domestic demand, higher international commodity prices, leading to strong pick-up in imports
Pakistan’s army chief flags non-state actors, disinformation as threats to global peace
- General Asim Munir says Pakistan expects Kabul not to allow its soil to be used for militancy
- He says absence of regulation over freedom of expression is deteriorating moral values
ISLAMABAD: Chief of Army Staff General Asim Munir on Friday identified violent non-state actors and the spread of disinformation as significant challenges to global peace while addressing a gathering in the federal capital, where he reaffirmed Pakistan’s commitment to promoting international stability.
The army chief made the remarks during a special session of the Margalla Dialogue, an annual conference that convenes policymakers, scholars and experts to discuss critical national, regional and global issues, where he highlighted Pakistan’s role in fostering global peace.
Organized by the Islamabad Policy Research Institute (IPRI), a local think tank, the conference provided a platform for the army chief to emphasize Pakistan’s contributions and express concerns about the issue of cross-border militancy.
“Terrorism by violent non-state actors and state-sponsored entities remains a significant global challenge,” the state-owned Associated Press of Pakistan (APP) news agency reported him as saying.
“We expect the Afghan interim government to ensure that Afghan soil is not used for terrorism against Pakistan and to take strict measures in this regard,” he added.
The army chief’s statement comes against the backdrop of a surge in militant violence in Pakistan’s western provinces bordering Afghanistan.
Officials in Islamabad have frequently accused Afghan authorities of “facilitating” cross-border attacks by armed factions, such as the banned Tehreek-e-Taliban Pakistan, which target civilians and security personnel— an allegation Kabul denies.
APP reported the army chief stated that Pakistan would not become part of any global conflict and would continue to play its role in promoting international peace and stability.
General Munir acknowledged the role of technology in disseminating information, though he cautioned that it also facilitated the rapid spread of disinformation.
He asserted that without comprehensive laws and regulations, disinformation and hate speech could destabilize political and social structures.
“Absence of proper regulations for freedom of expression is leading to the deterioration of moral values in societies worldwide,” he added.
The army chief expressed optimism about the country’s future, noting that about 63 percent of Pakistan’s population is under the age of 30, adding that the country was endowed with immense natural resources and had emerged as a major global agricultural producer.
He highlighted Pakistan’s significant role in the global freelancing industry and noted that its geographical location and seaports could position it as a vital trade hub for countries around the world.
Pakistan suspends mobile Internet in Balochistan, citing ‘public safety’ amid rising violence
- People in Balochistan say mobile Internet has been down for about three days in different areas
- PTA announcement comes days after a suicide bombing at a crowded railway station in Quetta
QUETTA: The Pakistan Telecommunications Authority (PTA) announced the suspension of mobile Internet services in various parts of the restive southwestern Balochistan province on Friday, saying the decision was taken to “ensure public safety” amid a surge in militant violence over the past several months.
The announcement follows a deadly suicide bombing at a crowded railway station in Quetta, the provincial capital, which killed at least 28 people, including Pakistani soldiers, and injured dozens of others.
The attack was claimed by the Balochistan Liberation Army (BLA), an outlawed separatist group that has targeted Chinese nationals in an effort to undermine the multibillion-dollar Pakistan-China Economic Corridor (CPEC) projects.
The BLA, the largest of several ethnic insurgent groups battling the Pakistani state, alleges that the province’s rich gas and mineral resources are unfairly exploited, a claim the government denies.
“The general public is hereby informed that, under the directives of authorized departments, mobile Internet services have been temporarily suspended in certain areas of Balochistan,” the PTA said in an official statement.
“This measure has been taken to ensure public safety, given the security situation in these areas,” it added.
The PTA statement did not specify the areas where mobile Internet services have been suspended, nor was there any clarification from other departments on whether the government was planning an operation against militants in these regions.
However, mobile Internet has already been down in the province’s Kech, Panjgur, Gwadar, Khuzdar, Loralai, Dukki, Ziarat, Harnai and Zhob districts for the last three days, causing significant hardships for students and the business community in these areas.
“Hundreds of students and businesses have been affected by the mobile Internet suspension,” Abdul Majid Dashti, a lawyer based in Turbat, told Arab News, adding that cellphone Internet had been down for nearly three days in the area.
Sadaqat Baloch, a journalist in Pakistan’s coastal town of Gwadar, which is central to CPEC, said authorities suspended mobile Internet in the area a day after the Quetta railway station bombing.
“People of the Makran region, including Khuzdar, are now deprived of mobile Internet, which has been creating problems for them,” he added.
The provincial government’s spokesperson was unavailable for comment on the recent mobile Internet suspension.
Pakistan felicitates Palestinians on 36th independence anniversary, reaffirms support
- Palestinians proclaimed the Declaration of Independence on Nov. 15, 1988, in Algiers
- Pakistan calls support to the Palestinian cause a ‘consistent facet’ of its foreign policy
ISLAMABAD: Pakistan on Friday felicitated the people of Palestine on the 36th anniversary of the Declaration of Independence, saying its support for the Palestinian cause has been the most consistent feature of the country’s foreign policy.
Proclaimed on November 15, 1988, during a meeting of the Palestine National Council in Algiers, the Declaration of Independence envisioned a sovereign Palestinian state in the West Bank and Gaza Strip, with Jerusalem as its capital.
It marked an important movement in the Palestinian struggle for self-determination and has since been a symbol of their aspirations for statehood.
“On the occasion of Declaration of Independence Day of the State of #Palestine, we extend our heartiest felicitations to its people and the Government,” the foreign office said in a social media post.
“Pakistan’s unflinching support to the Palestinian cause has been a consistent facet of our foreign policy,” it added. “We reaffirm our strong commitment to the Palestinian right to self-determination and our unwavering support for the establishment of an independent, viable, and contiguous state of Palestine, with Al-Quds-Al-Sharif as its Capital.”
The anniversary comes as the death toll in Gaza has surpassed 43,700 since the beginning of Israel’s military campaign more than a year ago, displacing nearly the entire population of the Palestinian territory.
Most of those killed in Israeli airstrikes and ground offensives are reported to be women and children, while the international community fears that the conflict could spread to the rest of the Middle East.
The situation has also exacerbated humanitarian concerns, with the United Nations warning of an impending famine in the besieged territory, where residents face acute shortages of food, water and medical supplies.
Muslims in Pakistan’s smog-shrouded Punjab province pray for rain
- The special prayer was held at over 600 government-run mosques in the province
- Punjab grapples every winter with smog, but the situation has worsened recently
LAHORE: Pakistan’s Punjab province declared a health emergency due to toxic smog on Friday, banning construction, shutting schools for another week and moving universities online, while hundreds of thousands of Muslims prayed for rain and forgiveness.
The faithful gathered at over 600 government-run mosques in the province for “Namaz-e-Istisqa,” a voluntary prayer for rain often offered in times of calamities, said Talha Mahmood, spokesman for the provincial Religious Affairs department.
“Today, we prayed for rain to decrease smog, though it is caused by humans’ own mistakes,” said Muhammad Ejaz, 48, who led prayers at a mosque in the sprawling provincial capital Lahore, adding the prayer aimed at seeking God’s forgiveness for people’s sins.
The province, Pakistan’s most populous, grapples every winter with smog, but air pollution has worsened in recent years, as a result of cold air trapping dust, low-grade diesel fumes and smoke from illegal stubble burning on fields.
Sajid Bashir, spokesman for the provincial Environment Department, attributed this year’s severe pollution to a lack of rain in September and October.
“Last year, rain spells reduced particulate matter; this year, we’re still waiting,” he said on Friday.
Lahore has topped Swiss group IQAir readings as the world’s most polluted city, for most of the week.
Punjab Senior Minister Marriyum Aurangzeb, announcing smog-reduction measures at a press conference, said the government had ordered the closure of construction, brick kilns, and furnace-based plants in Lahore and the city of Multan.
She said there would be a complete three-day lockdown from next Friday if the situation does not improve.
Last week the province ordered schools to close until Nov. 17, and on Friday the shift to online learning was extended for another week. Colleges and universities will also shut down, moving to virtual classes.
Authorities have already banned entry to parks, zoos, playgrounds and other public spaces.
Other parts of South Asia are also dealing with high levels of pollution and Punjab blames neighboring India for contributing to its hazardous air quality. New Delhi, the world’s most polluted capital, has banned non-essential construction, moved children to virtual classrooms and asked residents to avoid using coal and wood from Friday.
Pakistan orders VPN ban over militant use, with religious body calling them ‘un-Islamic’
- Interior ministry says ‘terrorists’ have been exploiting VPN services for violence, financial transactions
- Government has set up a portal for VPN registration, which can be done by the end of the ongoing month
ISLAMABAD: The Ministry of Interior sent a letter to the Pakistan Telecommunications Authority (PTA) on Friday, asking it to block illegal Virtual Private Networks (VPNs) across the country while citing their use by militant groups for financial transactions and violent activities.
This directive follows international criticism of Pakistan’s Internet restrictions, notably after the February general elections, where allegations of electoral manipulation led to the blocking of social media platform X.
Media reports also suggested the government was setting up a national firewall, which had led to the slowdown of Internet speed across Pakistan, saying the decision was taken to curb “anti-state narratives” by political activists.
More recently, the PTA launched a new portal for VPN registration, saying it wanted to ensure secure and uninterrupted operations for online users and businesses.
“I am directed to refer to the subject cited above [about blockage of illegal VPNs] and to state that VPNs are increasingly being exploited by terrorists to facilitate violent activities and financial transactions in Pakistan,” the ministry’s letter to the PTA chairman noted.
“Of late, an alarming fact has been identified, wherein VPNs are used by terrorists to obscure and conceal their communications,” it added. “VPNs are also being used for discreetly access pornographic and blasphemous contents.”
Earlier this week, the PTA already disclosed that nearly 20 million Pakistanis try to access pornographic websites on a daily basis that were banned by the authorities in 2011.
The letter requested the top PTA official to block illegal VPNs nationwide while pointing out that registration of VPNs with PTA could be made the end of the ongoing month.
VPN users in Pakistan have already reported significant disruptions to services since last weekend, with issues relating to connectivity and restricted access.
Pakistan’s decision to impose online restrictions have been questioned by free speech activists and businesses alike.
PREDA, Pakistan’s first membership-based organization dedicated to promoting and protecting the interests of professionals, also wrote a letter to the government earlier in the day, appealing for the adoption of stable digital policies to support growth and build an eco system for global competitiveness.
