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State Bank of Pakistan conducted its Open Market Operation

Karachi, September 28, 2017 (PPI-OT): State Bank of Pakistan conducted its Open Market Operation (Mop up) in following contracts on September 28, 2017 received and accepted as given below:

A: OMOs

       NO              OMO Tenor              Range            Number of Quotes Offered

       a           01 ­ Day (Mop up)       5.59% - 5.80%                 06

B: OMO RESULT

(Rs. in Millions)

                                                           Rate of Return
                                Amount          Amount                           Number of
 NO         OMO Tenor                                         Accepted
                                Offered        Accepted                       Quotes Accepted
                                                              (% p.a.)
   a        01 ­ Day           63,000.00       38,000.00        5.68                 03

             Total             63,000.00       38,000.00

For more information, contact:
Chief Spokesman
State Bank of Pakistan (SBP)
Central Directorate
I.I. Chundrigar Road, Karachi, Pakistan
Tel: +92-21-111-727-111
Tel: +92-21-39212562
Fax: +92-21-39212433 – 39212436
Email: syed.wasimuddin@sbp.org.pk
Website: www.sbp.org.pk

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Consumers’ confidence on Pakistan’s economy improves: CC Survey

Karachi, September 29, 2017 (PPI-OT):The results of the latest Consumer Confidence Survey, conducted during September 5 to 9, 2017 show that, in general, consumers’ confidence on Pakistan’s economy has increased. The overall Consumer Confidence Index increased by 5.07 percent compared to the previous survey, held in July 2017. The improvement in consumer confidence is reflected in the increase in Current Economic Conditions Index as well as Expected Economic Conditions Index. Moreover, the index, showing inflation expectations also increased by 2.6 percent during this period.

It may be recalled that State Bank of Pakistan is regularly conducting Consumer Confidence surveys through telephonic calls to consumers that are selected randomly across the country. These surveys are conducted after every two months and provide information on “what people are thinking” about current and future economic conditions, future trends in inflation, interest rates, unemployment, and their household income. Such information are helpful in the monetary policy formulation.

For complete report of the survey, please access SBP website at: http://dsqx.sbp.org.pk/ccs/index.php

For more information, contact:
Chief Spokesman
State Bank of Pakistan (SBP)
Central Directorate
I.I. Chundrigar Road, Karachi, Pakistan
Tel: +92-21-111-727-111
Tel: +92-21-39212562
Fax: +92-21-39212433 – 39212436
Email: syed.wasimuddin@sbp.org.pk
Website: www.sbp.org.pk

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Monetary Policy Statement

Karachi, September 29, 2017 (PPI-OT):Macroeconomic environment remains conducive to growth without impacting headline inflation. Favourable initial estimates of major crops, a healthy growth in credit to private sector and growing productive imports all indicate solid gains in the real sector. On the back of adequate food supplies and stable international commodity prices, headline inflation decelerated in the first two months of FY18. The pursuit of higher economic growth however poses growing challenges partly enunciated at the start of FY18. These include those arising from pressures on the external front and an expansionary fiscal policy.

Expounding the real sector, full year LSM data indicates a healthy and broad-based growth of 5.7 percent for FY17 as compared to its earlier estimates of 4.9 percent. In fact, LSM for July 2017 posted a growth of 13.0 percent. Delving deeper into FY18, manufacturing activity is expected to benefit from higher development spending, growing investments in CPEC-related projects, improvement in security condition, and the continued trend of stable and low cost of borrowing.

Furthermore, an upbeat industrial outlook and a promising assessment of major crops are going to have positive spillovers on the services sector. Based on current projections of agriculture sector growth, GDP growth is likely to reach the annual target of 6.0 percent for FY18 leading to an improved capacity to accommodate rising domestic demand.

Turning to inflation, average CPI inflation eased to 3.2 percent in Jul-Aug FY18 compared to 3.8 percent during the same period last year. With comfortable wheat and sugar stocks, no major disruption is expected from supply side in the coming months of FY18. However, the core inflation (non-food-non-energy), reflecting the underlying demand pressures in the economy, continues to maintain its higher level of 5.6 percent in the initial two months of the fiscal year.

This is also visible from IBA-SBP’s Consumer Confidence Survey of September 2017, which shows a modest rise in expected inflation during the next six months. Thus, with these demand and supply side dynamics, average CPI inflation is expected to remain well below FY18 target of 6.0 percent.

As depicted by core inflation, changes in monetary aggregates also indicate growing demand in the economy. Although credit to private sector recorded a net seasonal retirement of Rs 80.6 billion during 1st July to 15th September FY18, its year-on-year growth has edged up to 21.1 percent on 15th September 2017- as compared to 7.7 percent on 16th September 2016, reflecting an increase of Rs 892 billion during the year.

Led by historic low interest rates on the one hand and growing construction activity and consumer durables on the other, demand for credit picked up. At the same time, healthy deposit growth has improved supply of loanable funds with the banking sector and market rates remained stable. These favourable conditions at the beginning of upcoming credit cycle bode well for healthy credit off take for yet another year.

The higher trajectory of economic growth has generated complementary external sector pressures. The current account deficit for the first two months of FY18 has widened to US$ 2.6 billion. This is primarily driven by higher imports of productive goods, especially of machinery, metal and petroleum products. The increase in import of these three groups was strong enough to offset the combined impact of healthy growth in exports and workers’ remittances during Jul-Aug FY18.

On the financial account front, foreign direct investments recorded a net inflow of US$ 456 million in Jul-Aug FY18, which is more than double the level of inflows in the corresponding period last year. This, together with other financial flows, was however not enough to manage the higher current account deficit.

Going forward, there are anticipations of gain in exports on account of favourable global economic conditions, improvement in domestic energy supplies, and incentives given to exporting industry. Compared with information in July 2017, exports present an encouraging picture. However, imports are also expected to rise due to ongoing CPEC related investments and domestic economic activities, although at a slower pace than in FY17.

Amid declining number of workers proceeding abroad there are prospects of sluggish growth in workers’ remittances. Hence, an improvement in the country’s external account and its foreign exchange reserve relies upon timely realization of official financial inflows along with thoughtful adoption of structural reforms to improve trade competitiveness in the medium term. Following detailed deliberations and taking into consideration the above mentioned developments, the Monetary Policy Committee has decided to keep the policy rate at 5.75%.

For more information, contact:
Chief Spokesman
State Bank of Pakistan (SBP)
Central Directorate
I.I. Chundrigar Road, Karachi, Pakistan
Tel: +92-21-111-727-111
Tel: +92-21-39212562
Fax: +92-21-39212433 – 39212436
Email: syed.wasimuddin@sbp.org.pk
Website: www.sbp.org.pk

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Karachi Circular Railway, Keti Bandar, Economic zone Dhabeji to be revolutionary projects: Murad Ali Shah

Karachi, September 29, 2017 (PPI-OT):Sindh Chief Minister Syed Murad Ali Shah has said that Karachi Circular Railway (KCR) and Keti Bandar are most important projects, the former would resolve the commuters’ problems in the city and the latter would play vital role in boosting economy of the country in general and of the province in particular.

This he said while talking to Chinese Ambassador Mr Sun Weidong who called on him here at the CM House today. The meeting was also attended by Counsel General of China in Karachi, Principal Secretary to Cm Sohail Rajput. He said that KCR, Keti Bandar and Special Economic projects have been approved within the CPEC framework while the KCR has been has reached at the implementation stage. “I am thankful for your support and cooperation,” he said to ambassador of China.

The chief minister said that the KCR route has been cleared from encroachments and Pakistan Railways was on board for acquiring the 360 acres land for right of way (RoW) for KCR. The Keti Bandar projects is being processed for preparing its feasibility while land has been allocated for China-Pakistan Special Economic Zone at Dhabeji. “Once the feasibility and other approvals of the Keto Bandar and Special Economic Zone Dhabeji are made they would be presented in the next Joint Working Group (JWG) meeting,” he told the ambassador.

The ambassador told the chief minister that at present 20,000 Pakistanis, students and others are living in China. “This kind of mutual understanding for development and prosperity would further strengthen with the completion of the CPEC project,” the chief minister and added that he had personally witnessed that the Thari workers engaged in Coal Mining project and Chinese easily communicating with each other. “This shows that Tharis are also learning Chinese,” he said.

It may be noted that Sindh government through Fed government has already provided Feasibility report of KCR to Chinese Ministry of Transport, tender document has been made ready and by the second week of December 2017 contract would be awarded and the foundation stone of the KCR would be laid at Wazir Mansion on December 25, 2017- the birthday of Quaid-e-Azam Mohammad Ali Jinnah. He said that KCR, Keti Bandar and establishment of special economic zone at Dhabeji would usher in new vistas of development and prosperity in the province.

EDUCATION DEPT MEETING:

Sindh Chief Minister Syed Murad Ali Shah presiding over a meeting on Education dept expressed his satisfaction on the resumption of classes at Aisha Bawani College. “It was the commitment of Sindh government and support of students, parents, teachers and the civil society that education activities returned to Aisha Bawani, otherwise it would have been turned into marriage hall,” he said.

The chief minister directed the secretary education (both college and schools) to pay special focus on improving educational standard. “This would happen when the teachers would take classes properly, check copies, give home work to students and personally involve in the system,” he said and added otherwise nothing would improve.

The chief minister also issued directives to all the government departments, particularly the education, health and local government departments to properly follow their cases pending in the courts. “Onward I would take disciplinary actions if the any department lost the legal battles in the courts,” he warned.

For more information, contact:
Press Secretary,
Chief Minister House, Sindh
Tel: +92-21-99202019 (Ext: 336)
Website: www.cmsindh.gov.pk

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Neelum Jhelum Project: Dry test of electro-mechanical equipments starts

Lahore, September 29, 2017 (PPI-OT):The 969 MW-Neelum Jhelum Hydropower Project is fast heading towards completion, as dry testing of electro-mechanical equipments installed at the power house and the switch yard is in progress. This was stated by Wate...

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