Sunday, 26 May 2013

Monetary Policy of Pakistan April FY 13


Monetary Policy March FY13 Review:


It was highlighted in the monetary policy of February 2013 that to manage the balance of payment and to increase the inflation by expansion of money supply. The foreign exchange reserves of state bank declined to the payment of debt by $2. While the inflation rate declined by 1.5 percentage points till March 2013 contrary to state bank expectations. The situation further deteriorated by high debt payment while the inflow was very low according to the report. Both the net capital and financial inflow increased less considerably. The pressure is likely to increase in the coming months of the fiscal year FY13 as SBP has to make payments of IMF loans. Due to the decrease in inflation the real returns on rupees increased while the Nominal Effective Exchange Rate (NEER) depreciated by 5.2 percent and Real Effective Exchange Rate depreciated by 4.2 percent during the months of July to February of fiscal year FY13. The loans to private businesses increased while the energy shortages and borrowing from the bank sector continued. 

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