The federal cabinet has given a green light to the reviewed draft of the State Bank of Pakistan Amendment Bill 2021, promising complete self-sufficiency to the central bank while completely restricting the government from borrowing from the Bank.
Federal Information and Broadcasting Minister Fawad Chaudhry confirmed the news during a press briefing after the cabinet meeting on Tuesday.
The proposed law gives the SBP complete autonomy in order to target inflation instead of focusing on economic growth. The bill has been slammed by opposition parties and is one of the necessities which Pakistan has to fulfill under the International Monetary Fund Programme it agreed with during July 2019.
The Fund approved a 39-month $6bn arrangement underneath its Extended Fund Facility to support Pakistan’s economic reforms under the programme. The bill will allow a $1bn tranche to be disbursed under the EFF, which has been delayed since April.
The legislation in the matter is expected to be put forth in the National Assembly. According to the bill, the SBP’s prime objective will be to stabilize domestic prices along with supporting economic policies.
The bill states that the revisions suggested in the draft are consistent with international best practices while considering the country’s ground realities.
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