KARACHI: Pakistan’s central bank on Monday cut its key interest rate by 150 basis points, or 1.5 percent, after keeping it at an all-time high of 22 percent since June last year, in a much-expected move that marks the country’s first rate cut in four years.
The decision to slash the policy rate to 20.5 percent comes after data showed inflation had eased to a 30-month low of 11.8 percent in May.
The rate cut is more than the expectation gauged through surveys conducted by various financial institutions that predicted about 100bps reduction.
“Monetary Policy Committee (MPC) noted that while the significant decline in inflation since February was broadly in line with expectations, the May outturn was better than anticipated earlier,” the State Bank of Pakistan (SBP) said in a statement.
The committee assessed that underlying inflationary pressures were also subsiding amidst tight monetary policy stance, supported by fiscal consolidation.
At the same time, the MPC viewed some upside risks to the near-term inflation outlook associated with the upcoming budgetary measures and uncertainty regarding future energy price adjustments.
“Notwithstanding these risks and today’s decision, the Committee noted that the cumulative impact of the earlier monetary tightening is expected to keep inflationary pressures in check,” the statement read.
Pakistan’s central bank had raised its policy rates in an emergency meeting in late June last year to a record high of 22 percent. Monday’s move is the first rate cut since Jun 25, 2020.
While financial analysts called it a bold move, industrialists said it was “too little, too late.”
“A rate cut of 1.5 percent was a bold decision by the State Bank of Pakistan, especially before the finalization of the new IMF (International Monetary Fund) Program and the announcement of Budget FY25,” said Khurram Schehzad, CEO of Alpha Beta Core financial advisory firm.
The South Asian country is set to unveil budget for the next fiscal year in a parliamentary sitting on June 12.
Islamabad is currently locked in talks with the IMF for a longer-term bailout of around $8 billion and the country is expected to formally request for the program after the budget.
However, Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), said the business community was expecting higher and more substantive rate cuts.
“The policy rate cut announced today is too little, too late. The business, industry and trade community was expecting higher and more substantive cut after inflation dropped to 11.8 percent which is lowest in 30 months,” Sheikh said.
The FPCCI president said the interest rate should come down to 15 percent to enable Pakistani exporters compete in regional and international export markets by reducing the cost of capital. This should be accompanied with the fulfillment of the government’s promise to rationalize electricity tariff for the industry, he added.
Iftikhar Ahmed Sheikh, president of Karachi Chamber of Commerce & Industry (KCCI), expressed his disappointment over what he called a meager rate cut, saying the business community was expecting a substantial reduction of at least 4-5 percent.
“However, as the SBP has decided to ease monetary policy by 150 basis points, we hope that this approach continues in the days to come to gradually bring down the interest rate to single digit,” he said in a statement.
He said lower interest rate in line with international trends would certainly encourage borrowings by the private sector that would prove favorable for the economy, encouraging business expansion as well as industrialization.
The KCCI president called the rate cut “first step in the right direction” and hoped to see further reduction in interest rate in a country where the cost of doing business had been exorbitantly high.
Pakistan’s central bank cuts policy rate by 1.5 percent to boost economy
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Pakistan’s central bank cuts policy rate by 1.5 percent to boost economy
- The decision comes a week after data showed inflation slowed to a 30-month low of 11.8 percent in May
- While financial analysts called Monday’s rate cut a bold move, industrialists said it was ‘too little, too late’
Pakistan forms task force against Islamabad protesters as Imran Khan’s party seeks action against ministers
- Task force will be headed by the interior minister and will identify those who ‘spread violence’ in the capital
- PTI’s information secretary shares 12 names, saying the party has evidence they were killed in Islamabad
ISLAMABAD: Prime Minister Shehbaz Sharif on Friday formed a task force to identify and prosecute individuals involved in last week’s protest in Islamabad, as the opposition Pakistan Tehreek-e-Insaf (PTI) claimed 12 supporters were killed in clashes and demanded police cases against top government ministers.
The PTI protest began on November 24 as the party supporters demanded the release of jailed leader, former premier Imran Khan, who has been incarcerated for over a year.
The government had warned against demonstrations in the federal capital, but protesters gathered in defiance, resulting in a crackdown against them. While PTI accuses the government of using live ammunition to kill and seriously injure demonstrators, officials claim PTI activists fired on security forces, killing five personnel.
The task force, headed by Interior Minister Mohsin Naqvi, was announced as Sharif chaired a high-level security meeting, with Chief of Army Staff General Asim Munir in attendance, in Islamabad.
“The task force will ensure those responsible for spreading chaos and violence on November 24 are identified and brought to justice in accordance with the law,” the PM Office said in the statement.
Meanwhile, PTI’s Secretary Information Sheikh Waqas Akram, speaking at a news conference in Peshawar, alleged that the government had indiscriminately targeted protesters, sharing names of 12 individuals the party said were killed.
He said videos and evidence from the protest site near the parliament building in Islamabad corroborated the party claims, adding that the actual death toll could be higher as many were missing or critically injured.
“We strongly demand police complaints be lodged against the prime minister, the interior minister and information minister,” he said. “Without this, public unrest will continue to grow.”
“We urge the judiciary to step forward and ensure these killers are brought to justice,” he added.
The government has also announced plans to create a federal riot control force, saying it would be equipped with international-standard resources and skills to prevent such protests in the future.
Pakistan, China hold joint military drill amid Beijing’s concerns over attacks on nationals
- Warrior VIII, which began on November 19, aims to bolster counterterrorism capabilities
- Pakistan’s army chief interacted with the participants of the exercise and praised their morale
ISLAMABAD: Chief of Army Staff (COAS) General Asim Munir on Friday visited the National Counter Terrorism Center (NCTC) in Pabbi, located in the Gujrat division of Punjab province, to observe a joint counterterrorism exercise between the Pakistan Army and the People’s Liberation Army (PLA) of China, said an official statement.
The three-week “Warrior VIII” exercise, which began on November 19, is the eighth iteration of bilateral training aimed at bolstering counterterrorism capabilities and enhancing military cooperation.
The exercise comes as China’s security concerns in Pakistan have grown following a spate of attacks targeting Chinese nationals working on dozens of lucrative projects in the country.
“The COAS was briefed on the scope and conduct of the exercise,” the military’s media wing, Inter-Services Public Relations (ISPR), said. “He also interacted with the participants of the exercise.”
Thousands of Chinese nationals have been working on the multibillion-dollar China-Pakistan Economic Corridor (CPEC) for nearly a decade, with several of them being targeted by different militant groups operating in Pakistan.
Earlier this year, in March, a suicide bomber attacked a convoy near Besham in Khyber Pakhtunkhwa, killing five Chinese engineers. A few months later, in October, a bombing near Karachi airport targeted Chinese workers ahead of the Shanghai Cooperation Organization (SCO) Summit in Islamabad.
Beijing has voiced concerns over the safety of its citizens working in Pakistan and has reportedly proposed a joint security mechanism.
However, the foreign office said this month the two countries have a “robust dialogue and cooperation” on a range of issues, including counterterrorism and the security of Chinese nationals in the country.
It also expressed the government’s resolve to work with Chinese authorities to ensure the safety and security of their nationals, as well as their projects and investments.
According to Voice of America, Warrior VIII is the first joint counterterrorism exercise between the two countries in five years.
The ISPR said General Munir also praised the professionalism and high morale of the officers and soldiers participating in the joint military exercise.
European aviation safety agency lifts Pakistan airline ban — minister
- The development will revive PIA’s flights to Europe, strengthen the government’s privatization drive
- Pakistan’s Airblue has secured Third Country Operator authorization to fly to European destinations
KARACHI: The European Aviation Safety Agency (EASA) has lifted a ban on Pakistan International Airlines (PIA) flights after a span of four years, Defense and Aviation Minister Khawaja Muhammad Asif announced Friday, commending all the relevant officials who made the breakthrough possible.
The ban on PIA flights was imposed in 2020 after a crash in Karachi killed 97 people, followed by a former Pakistani aviation minister’s statement claiming that nearly 40 percent of local pilots held “dubious” licenses.
This statement raised global concerns about safety oversight, leading to the grounding of PIA’s European operations.
The suspension added to PIA’s financial troubles, as the debt-ridden national carrier continued to incur losses amid its struggle to recover from a tarnished reputation. The government also faced difficulties privatizing the airline, a condition set by the International Monetary Fund (IMF) during recent loan negotiations, due to its precarious financial situation.
“It is a momentous day to announce that the European Commission and European Aviation Safety Agency (EASA) has lifted the suspension on PIA flights to Europe,” the aviation minister wrote in a social media post.
He also announced that the decision granted Third Country Operator (TCO) authorization to another Pakistani airline, Airblue, marking a significant development for the aviation sector.
TCO authorization granted by EASA allows non-European airlines to operate commercial flights into, within or out of European Union airspace.
Airblue, Pakistan’s second-largest airline, operates domestic and regional routes and is expected to explore European operations following the TCO authorization.
Responding to the development, PIA lauded the lifting of the ban as a testament to its adherence to international safety standards.
“This milestone ensures that the entire nation can once again travel directly to European destinations with their national airline,” the airline said in a statement, adding it had worked tirelessly over the past four years to meet EASA’s safety requirements.
“The PIA administration will remain fully compliant with EASA and its rules and regulations,” it added.
Asif credited the lifting of the suspension to reforms in Pakistan’s Civil Aviation Authority (PCAA), which he said were aimed at aligning the regulator with international standards.
“I am grateful to the European Commission and EASA for conducting a transparent process and our commitment to ensuring aviation safety in Pakistan,” he said in the social media message.
The development is expected to help revive PIA’s European operations and strengthen the government’s privatization efforts by improving the airline’s appeal to potential investors.
Pakistan receives 38,000 Hajj applications in 10 days
- Total number of applications received so far is 11,000 more than during the corresponding period last year
- Pakistan has a Hajj quota of 179,210, evenly split between the government and private tour operators
ISLAMABAD: Pakistan’s Ministry of Religious Affairs said on Friday that 38,000 Hajj applications had been received in the first 10 days of the submission period, 11,000 more than during the same period last year.
The surge comes as Pakistan prepares to send 179,210 pilgrims for the annual Islamic pilgrimage in 2025, under a quota evenly divided between government and private Hajj schemes.
“By the tenth day, 38,000 Hajj applications have been received,” a ministry said in a statement, adding that designated banks would continue accepting applications over the weekend. The final deadline for submissions is Dec. 3.
Pilgrims under the regular Hajj scheme can secure their booking with an initial payment of Rs200,000 ($719), according to the statement.
Pakistan has steadily improved facilities for pilgrims in recent years.
One key initiative is the Makkah Route Initiative, which streamlines immigration processes by enabling pilgrims to complete formalities at their departure airports.
Initially tested in Islamabad in 2019, the program was later expanded to Karachi, benefitting tens of thousands of travelers.
Efforts have also included the launch of a mobile application, Pak Hajj 2025, to provide pilgrims with essential updates, flight details and navigation assistance in Saudi Arabia.
Hajj, one of the five pillars of Islam, attracts millions of Muslims annually to Makkah, with Pakistan consistently being among the largest contributors of pilgrims.
ICC talks continue on fate of Pakistan Champions Trophy
- Event’s fate has been hanging in the balance since India declined to visit Pakistan
- ICC meeting adjourned without a decision but will reconvene ‘in the next few days’
KARACHI: The International Cricket Council (ICC) said talks were continuing to settle uncertainty around next year’s Champions Trophy, sources told AFP, after India refused to travel to host nation Pakistan.
The event’s fate has been hanging in the balance since earlier this month, when the ICC said India had declined to visit Pakistan for the eight-team tournament.
The nuclear-armed neighbors have fought three wars since being carved out of the subcontinent’s partition in 1947 and that rivalry is often reflected on the cricket field.
A meeting by the Dubai-headquartered ICC was held briefly on Friday but adjourned without a decision, according to several sources with knowledge of the talks who were not authorized to speak to media.
“All parties continue to work toward a positive resolution,” said one source, adding that “it is expected that the board will reconvene in the next few days.”
The Pakistan Cricket Board has previously ruled out proposals allowing India to play in a neutral third country, insisting the full schedule from February 19 to March 9 must be staged on their turf.
Another source said the “Pakistani stance remains the same” following Friday’s brief meeting.
