Current Monetary policy of Pakistan Prepared by Syeda Mehak Nayyab

1. MONETARY
POLICY OF
PAKISTAN
PRESENTED BY :
MEHAK NAYYAB

2. Monetary policy
 Monetary policy is the process by which the monetary
authority of a country (usually the central bank)controls
the supply of money in the economy in order to control
aggregate demand, and promote economic growth and
stability.
 The central bank, which has a monopoly over the supply
of money usually undertakes this policy.

3. Objectives of monetary policy
There are basically 3 major objectives:
• To ensure price stability.
• To encourage economic growth.
• To ensure stability of exchange rate of money.

4. Types of Monetary Policy
• There are two main reasons why the central bank carries out
monetary policy:
• Expansionary monetary policy
• Contractionary monetary policy

5. Tools for monetary policy
There are following tools for monetary policy:
• Open market operations
• Discount rate
• Change in reserve ratio

6. Monetary Policy of Pakistan
• The central bank undertakes the monetary policy.
• The Monetary Policy Committee is responsible to formulate
and take decisions regarding monetary policy stance.
• SBP issues Monetary Policy Statement and Decisions six times a
year on its website. These documents provide analysis of
current economic conditions and sets out the central bank
policy rate.
• The State Bank of Pakistan announced its new monetary policy
on Friday. It announced to increase the key interest rate by 50
basis points to 10.75%.
• At its meeting on 16th July 2019, the Monetary Policy
Committee (MPC) decided to raise the policy rate by 100 bps to
13.25 percent with effect from 17th July 2019.