Saturday, 3 June 2023

State Bank to be granted autonomy as parliament passes amendment bill

The State Bank of Pakistan (SBP) is soon be granted autonomy as an amendment bill was approved in the parliament on Wednesday, bringing Pakistan a step closer to reviving the $6 billion International Monetary Fund (IMF) loan programme.

According to a report by Bloomberg in this regard, the majority of lawmakers gave an approval to amend the Banking Services Corporation (Amendment) Bill, 2021, during a joint meeting of the parliament’s upper and lower houses.

The bill seeks to reduce the Finance Ministry’s oversight of the SBP by removing its nominee on the central bank’s board.

As per the report, the passage of the bill would help the government in clearing at least one hurdle in the deal with the IMF for resuming the extended fund facility. The loan is a necessary cushion for the South Asian economy, which has seen imports swell as it emerges from Covid-induced disruptions and inflation surge to the fastest in Asia.

The situation has weighed on the rupee, which is Asia’s worst performer in the past six months.

To recall, IMF had posed its concern over the autonomous status of the State Bank of Pakistan as the government had committed on granting autonomy to the central bank to the Fund in March 2021.

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