State Bank of Pakistan announce new monetary policy | Khaqan Najeeb &  Abid Suleri's Analysis - video Dailymotion

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#statebankofpakistan #SBP #BreakingNews #statebank   State Bank of Pakistan announce new monetary policy | Khaqan Najeeb &  Abid Suleri's Analysis

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00:00Monetary policy for one and a half month has been issued by the Governor State Bank.

00:04100 basis points have been reduced in the interest rate.

00:07After that, 19.5% has been reduced.

00:101% reduction has been announced by the State Bank.

00:13The current interest rate of the State Bank was 20.5%.

00:17In June 2024, the monthly rate of inflation was 12.6%.

00:21The current account loss of June 2024 is 32.9 crore dollars.

00:25Last year, the current account loss was 68.1 crore dollars.

00:29On behalf of the country's economy, I would like to thank the Governor of the State Bank.

00:33He said that the rate of inflation is decreasing.

00:36There are no restrictions on the State Bank.

00:40Mr. Khakan Najeeb is with us to talk about this issue.

00:43Thank you very much, Mr. Khakan, for your time.

00:46You said that 100 basis points have been reduced in the interest rate.

00:50How do you see this monetary policy?

00:53If you look at it clearly, there is a lot of room for monetary easing in Pakistan.

01:00This means that if the headline inflation is 12.6% at the moment,

01:05and you have reduced the rate by 1%,

01:08it means that the real rate of 6.5% is still positive.

01:15Secondly, the external loss has also been managed.

01:19The economy has slowed. Demand has broken.

01:22FX reserves have also been built. Rupees are also stable.

01:25Despite repatriation, you have allowed 2.2 billion dollars.

01:30So, all in all, I think it was a fair room.

01:33The State Bank is still on the conservative side.

01:37Obviously, there is an attachment with the IMF.

01:40Because of that, the room to cut in Pakistan is being used at a minimum.

01:44And a lot of thought was being given that it would be cut by around 1%.

01:50I still think that Pakistan has a lot of room to cut.

01:55Because businesses are slow.

01:57Large-scale manufacturing is almost flat.

02:00If you look at next year's inflation estimates,

02:03you can clearly see that the higher band of the State Bank is 13.5%.

02:10This means that on a forward-looking basis,

02:13you are still getting a very clear room of 6%.

02:18The real interest rate is positive.

02:20So, all in all, I think there is still hope.

02:22When we are ongoing, we can reduce this rate further.

02:27And we can give a little impetus to the economy.

02:29So, Mr. Khakha and Mr. Rajeev,

02:31what do you think will be the impact of this monetary policy on the life of the common man?

02:36And how much will it affect the inflation rate?

02:38Will there be a reduction?

02:39Hopefully, people will start coming back to a business.

02:44They will hope that in the coming days,

02:47this rate will further ease in Pakistan.

02:50The energy prices that we are seeing right now,

02:53apart from that, there is no sign of an inflationary impact.

02:56And next year, GDP will remain at 3.5%.

03:02This has been said in the monetary policy.

03:04Mr. Khakha and Mr. Rajeev were presenting their comments on this.

03:07And 100 basis points have been reduced in the interest rate.

03:101% has been reduced in the interest rate.

03:12And now the current interest rate has been reduced by 5%.

03:16The current account loss has been reduced.

03:18To talk about this, Mr. Abid Suleri is also with us.

03:21Thank you very much, Mr. Abid, for taking the time.

03:23Please tell us, 1% has been reduced in the interest rate.

03:26What will you say about the new monetary policy?

03:28Yes, this was absolutely expected.

03:30Because the inflation numbers have improved a little.

03:34Pakistan's external financial flow has improved.

03:38After the staff level agreement with IMF,

03:41the credit worthiness has improved.

03:44And today, the Fitch has increased Pakistan's rating from CCC to CCC+.

03:49Which is the rating of long-term borrowing.

03:51So, in the context of all these things, it was expected

03:54that the interest rate will be reduced.

03:57And this 1% reduction will bring at least a positive sentiment for the market.

04:05So, Mr. Abid Suleri, last time it was said that 150 basis points were reduced.

04:10And this time, 150 basis points have been reduced.

04:13100 basis points have been reduced.

04:15So, this time, how do you see the monetary policy compared to last time?

04:20Because a consolidating policy has been going on for a long time.

04:26Suddenly, I didn't think it was appropriate to lose it in Pakistan.

04:33And I think they did the right thing.

04:35Because our economy still has some chips and butts.

04:39The biggest risk at the moment is political risk and uncertainty.

04:43The second biggest risk is climate change and monsoon rains.

04:47So, in the presence of these risks,

04:49it is obvious that the state bank does not want to take a big daring step.

04:53And because the policy is revised every two months.

04:56If this trend continues like this,

04:58it is possible that after 9 months, you will see some improvement.

05:02So, Mr. Abid Suleri, after this monetary policy,

05:05where do you see the business going?

05:07And tell us about the inflation rate.

05:09How much will it affect?

05:11These are just sentiments.

05:13I mean, there will be positive sentiments in the business sector.

05:161% does not make much difference.

05:18But at least a positive message is going on

05:21that there was a reduction in the previous monetary policy,

05:23and there is still a reduction.

05:24So, there was a very tight monetary policy in Pakistan

05:29and a very high interest rate.

05:31So, it is a very clear indication that there will be a reduction.

05:34And what effect will this policy rate have on the life of the common man?

05:38I do not think that it will have a special effect on the life of the common man

05:43which is reflected in the monetary policy.

05:45Unless you have taken a loan for cars

05:49or you are giving your house mortgage

05:51or using a credit card.

05:53But when there is a reduction in the government's expenses,

05:56which has to be repaid,

05:58then the government definitely has a cushion

06:00so that it can be spent on the common man.

06:02Okay, so next year the GDP growth is expected to be 2.5 to 3%.

06:06Will it be possible?

06:08There are two very important factors on this.

06:11One is the oil prices in the international market

06:14and the second is monsoon and climate change.

06:17And the third domestic factor is our internal political risk with uncertainty

06:22and at the moment the culture of protests in Islamabad and the rest of the country is full.

06:27So, we will have to keep these three factors in mind

06:30to see how far Pakistan can go for its GDP growth.

06:34Thank you very much, Mr. Abiz Hulairi.

06:36You were giving your comment in this regard.

06:38A reduction of 100 basis points has been announced in the interest rate.

06:41And now the current interest rate is 19.5%.

State Bank of Pakistan announce new monetary policy | Khaqan Najeeb & Abid Suleri's Analysis

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