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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