In­de­pen­dent body to un­veil mon­e­tary pol­icy on Jan 30

The Pak Banker - - COMPANIES/BOSS - Staff Re­port

The Mon­e­tary Pol­icy Com­mit­tee shall, with­out prej­u­dice to its pow­ers and func­tions and those of the Bank, sup­port the gen­eral eco­nomic poli­cies of the Fed­eral Govern­ment and shall for­mu­late, sup­port and rec­om­mend the mon­e­tary pol­icy, in­clud­ing, as ap­pro­pri­ate, de­ci­sions re­lat­ing to in­ter­me­di­ate mon­e­tary ob­jec­tives, key in­ter­est rates and the sup­ply of re­serves in Pak­istan.

Ac­cord­ing to Sec­tion 9E of the SBP Amend­ment Act (2015) de­fines the pow­ers and func­tions of MPC, the com­mit­tee will ap­prove and is­sue the mon­e­tary pol­icy state­ment and other mon­e­tary pol­icy mea­sures. It will per­form any other func­tions con­ferred on it by law; and (d) carry out any an­cil­lary ac­tiv­i­ties in­ci­den­tal to the ex­er­cise of its func­tions un­der this Act." The first meet­ing of the MPC has been sched­uled on 30th Jan­uary, 2016.

MPC com­prises 9 mem­bers in­clud­ing three mem­bers of the Board nom­i­nated by the Board it­self, three ex­ter­nal mem­bers who shall be econ­o­mist and ap­pointed by the Fed­eral Govern­ment on rec­om­men­da­tion of the Board and three se­nior ex­ec­u­tives of the Bank nom­i­nated by the Gov­er­nor.

The Gov­er­nor State Bank of Pak­istan is the Chair­man of the com­mit­tee. Pur­suant to the es­tab­lish­ment of the said com­mit­tee un­der sec­tion 9D of the Act, mem­bers have been nom­i­nated for the said com­mit­tee. The three mem­bers of MPC from the Board in­clude Khawaja Iqbal Has­san, Muhammed Hi­day­at­ul­lah and, Za­far Ma­sud.

The Fed­eral Govern­ment has ap­pointed Dr. Asad Za­man and Dr. Qazi Ma­sood Ahmed as the ex­ter­nal mem­bers while the third po­si­tion re­mains va­cant. The ex­ter- nal mem­bers of the MPC have been ap­pointed for a pe­riod of three years and shall be el­i­gi­ble for reap­point­ment for an­other term of three years. The Gov­er­nor has nom­i­nated Riaz Ri­azud­din (Deputy Gov­er­nor Pol­icy), Mr. Saeed Ah­mad (Deputy Gov­er­nor, Fi­nan­cial Mar­kets, IB &SI) and, Jameel Ahmed (Ex­ec­u­tive Di­rec­tor, Fi­nan­cial Sta­bil­ity and Bank­ing Su­per­vi­sion Group) as mem­bers.

SBP achieves an im­por­tant land­mark in terms of an in­de­pen­dent mon­e­tary pol­icy set­ting.

In Novem­ber 2015, the Par­lia­ment leg­is­lated amend­ments in the State Bank of Pak­istan Act, 1956 es­tab­lish­ing an in­de­pen­dent Mon­e­tary Pol­icy Com­mit­tee (MPC) em­pow­ered to make mon­e­tary pol­icy and its al­lied de­ci­sions. Ear­lier, there was an Ad­vi­sory Com­mit­tee on Mon­e­tary Pol­icy with the man­date to make rec­om­men­da­tions to the Board, which was en­trusted with the pow­ers to make mon­e­tary pol­icy de­ci­sions.

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