Pakistan

Govt ‘woos’ rival senators to pass SBP bill

IMF meeting to revive stalled loan programme put off again until Feb 2

Our Correspondent January 27, 2022

The SBP kept the interest rate unchanged to support businesses during the Covid-19 pandemic. PHOTO: FILE

ISLAMABAD:

Pakistan’s failure to have the State Bank of Pakistan Amendment Bill imposed as an Act has compelled the International Monetary Fund (IMF) to again put off the meeting scheduled on January 28 (Friday) to approve the country’s sixth economic review as the government plans to have the legislation approved by the upper house of parliament by reaching out to opposition lawmakers behind the scenes.

The meeting of the IMF Executive Board will now be held on February 2. According to the IMF, the meeting was postponed at the request of Pakistan.

The SBP bill has become a major hurdle for the PTI-led government for the revival of the stalled IMF programme. Otherwise, it had met nearly all conditions for the release of the $1 billion tranche by the global lender, including the withdrawal of tax exemptions worth Rs343 billion through the “mini-budget”, reduction in development funds and increasing the power tariff as well as fuel prices.

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Having the SBP amendment bill passed by the Senate has become a challenge for the government, and it intends to overcome it in the coming Senate proceedings either on Friday or Monday.

The government has contacted opposition lawmakers behind the scenes to convince them not to attend the House during voting.

As in the past, on a day when the treasury numbers in the Senate are higher than those of the opposition, the government intends to pass the SBP bill through a supplementary agenda.

Government sources said the inclusion of the SBP bill in the regular agenda was tantamount to alerting the opposition.

The government is seeking the bill’s approval from the House. However, the opposition is adamant on sending it to the Senate Standing Committee on Finance.

The ruling PTI has invited its senators as well as those belonging to its allies to a luncheon on Thursday (today) hosted at the farmhouse of a top government official. There, a strategy will be chalked out for having the bill approved on Friday.

The government wanted to pass the bill last Monday or Tuesday but it was not possible because of the absence of four senators.

Separately, the local rupee continued on its downward trajectory, closing at 176.98 against the dollar due to uncertainty over the sixth review of the IMF.

According to the State Bank data, the rupee shed 0.15%, closing at Rs176.98 against the greenback in the interbank market.

The decline came on the back of increased demand from the importers and a lack of sufficient supplies. This was coupled with a delay in the IMF review.

With the fresh decline of 0.15%, the rupee has depreciated by 12.33% (or Rs19.44) since the start of the current fiscal year on July 1, 2021, the central bank’s data showed.