Islamabad: Federal Information and Broadcasting Minister Fawad Chaudhry on Tuesday (December 28) announced that the government has approved a bill aimed at granting wider autonomy to the State Bank of Pakistan (SBP) in its fiscal policies, the news source reported. The bill named ‘the State Bank of Pakistan (SBP) Amendment Bill 2021’ was tabled before the parliament which was later passed.
According to reports, with the passage of the bill, the SBP will have more authority to formulate policies related to price stability, achieve a sustainable fiscal policy to prevent the boom and bust of the economic cycle, and support economic policies as its tertiary goal. It was also said that following the approval of the law, the government will be unable to acquire a loan or guarantee from SBP directly.
Similarly, the bill prohibits SBP from acquiring government assets in the main market. On the other hand, the government will continue to buy government securities on the secondary market, where they are exchanged among investors.
Furthermore, the bill includes instructions for the SBP’s board of governors (BOG), according to which, the government would have no voting rights. Other issues delineated by the bill include the procedure for appointing the SBP’s BOG chairman and the procedure for introducing bills in parliament that directly affect fiscal policy or SBP operations.
It is worth noting that Pakistan and the IMF recently reached a staff-level agreement for the release of USD 1 billion through the Extended Fund Facility (EFF) programme. The agreement has asked that the government enact a measure pertaining to SBP autonomy to release its USD 1 billion tranche.
Iqra holds BS in International Relations and is passionate about writing engaging content on trending real estate topics. When not working, she is either spending time with family, shopping, or discussing shows & movies.
