ISLAMABAD: Pakistani Interior Minister Mohsin Naqvi met with Saudi Arabia’s Minister of Interior, Prince Abdulaziz bin Saud bin Naif, in Riyadh on Tuesday and discussed security cooperation and joint narcotics control measures. 

Naqvi’s meeting with the Saudi interior minister follows a meeting on Monday with Major General Mohammed bin Saeed Al-Qarni, the head of the Kingdom’s General Directorate of Narcotics Control (GDNC). 

Naqvi arrived in Riyadh on Sunday to discuss bilateral ties as both countries seek closer economic, investment and security ties.

“The ministers discussed security cooperation between Pakistan and Saudi Arabia,” the Pakistani interior ministry said in a statement. “Prince Abdulaziz and Mohsin Naqvi also discussed measures to combat drug smuggling and other issues of mutual interest. The meeting included discussions on enhancing cooperation in narcotics control.”

On Sunday, Naqvi also met with the Kingdom’s Director of Public Security, Lt. Gen. Mohammed bin Abdullah Al-Bassami, and inspected various departments of the state-of-the-art Directorate of Public Security and the Safe City Center.

“During the meeting, it was agreed to activate the joint task force [on public security] between Pakistan and Saudi Arabia soon,” the Pakistani interior ministry said in a statement, with Naqvi adding that he was glad to see “excellent” public security mechanisms in Saudi Arabia and both sides could benefit from each other’s experiences in the field of police training.

ISLAMABAD: Analysts said on Tuesday Pakistan’s monetary policy was “adequate” to manage inflationary and external risks while also supporting economic growth, a day after the central bank cut its key policy rate by 200 basis points to 13 percent.

This is the fifth straight reduction since June as the country keeps up efforts to revive a sluggish economy with inflation easing. Pakistan’s latest move makes this year’s cuts one of the most aggressive among emerging market central banks in the current easing cycle. Cumulatively, the central bank has cut rates by 900 basis points during 2024, even higher than during the pandemic in 2020 when it cut 625 basis points in a year. 

Monday’s move follows cuts of 150 bps in June, 100 in July, 200 in September, and a record cut of 250 bps in November, that have taken the rate down from an all-time high of 22 percent, set in June 2023 and left unchanged for a year.

“The key driver for this [rate cut] decision is continuous decline in food prices … sticky core inflation and volatile inflation expectation of consumers and business are also key factors,” Topline Securities said in an analysis of the monetary policy announcement on Monday evening.

“In addition, key demand indicators have shown signs of improvements. Based on these factors, central bank believes that current approach of monetary settings is adequate to manage inflationary and external risks and will also support economic growth.”

Key developments as highlighted by the monetary policy committee were a third consecutive month of a current account surplus, supportive global commodity prices, higher credit offtake primarily driven by the Advance-to-Deposit Ratio (ADR) threshold and a widening revenue shortfall by the Federal Board of Revenue. 

“Policy rate cuts since June 24 are beginning to take effect and real policy rate remains suitably positive to ensure inflation stabilizes within the target range of 5 percent-7 percent,” the report said. 

For the next fiscal year, average inflation is likely to remain much lower than the earlier forecast of 11 percent-13 percent. Core inflation saw a slight decline in November, while consumer inflation expectations edged higher. However, the inflation outlook remains exposed to risks such as additional revenue measures, a resurgence in food inflation, and rising global commodity prices, Topline added. 

Responding to a question, the governor of the central bank said on Monday the sharp decline in the policy rate was likely to aid the government on the expenditure front and despite the shortfall on revenue, the fiscal balance was expected to remain in the budgeted range.

Pakistan is navigating a challenging economic recovery path and has been buttressed by a $7 billion facility from the International Monetary Fund (IMF) in September.

While announcing the monetary policy, the central bank noted that “considerable efforts and additional measures” would be required for Pakistan to meet its annual revenue target, a key focus of the IMF agreement.