Tag: Murtaza Syed

Inflation may drop to 5-7% by the next fiscal year: SBP deputy governor

According to Dr Murtaza Syed, deputy governor of the State Bank of Pakistan (SBP), Pakistan would probably reach its 5-7 per cent inflation target by the start of the following fiscal year because of a positive base effect and ‘tighter’ macroeconomic regulations.

According to Dawn, the SBP deputy head said that inflation in Pakistan quadrupled from 13–14 per cent to around 25–27 per cent since June as a result of an increase in POL costs during a Zoom session hosted by the World Bank.

Although Pakistan does have an issue with inflation, it has lately started to decline and showed a “greater than expected” decline in the past month, he noted.

Dr Syed claims that inflation has “kind of crested” and will begin to drop for the remainder of the year.

The SBP deputy chief also referred to worries over Pakistan’s economic outlook as “exaggerated” and claimed that Pakistan was at least $10 billion over-financed as a result of inflows from friendly nations and pledges made by development partners in the wake of floods.

According to a central bank official, Pakistan needed about $31 billion in external financing, but had $37 billion in accessible funding, which was $6 billion more than it needed. The recent floods, he said, “may have some effects on the current account deficit, but this is before taking into account the floods.”

October 7, 2022
SBP raises policy rate to 14-year-high of 15 per cent

In an attempt to calm the economy, control inflation, and support the beleaguered rupee, the State Bank of Pakistan’s Monetary Policy Committee (MPC) decided to raise the policy rate by 125 basis points (bps) to 15 per cent on Thursday.

The previous policy rate at the same level was in 2008, so the current policy rate is at a level that is 14 years higher. The committee also disclosed that, in order to improve the transmission of monetary policy, interest rates on EFS and LTFF loans are now tied to the policy rate.

Following the MPC meeting on Thursday, SBP Acting Governor Dr Murtaza Syed gave a virtual press conference where he announced the monetary policy decision. He told the media that the rate of inflation has been rising at its highest rate since 1970.

“Globally, inflation is at multi-decade highs in most countries, and central banks are acting aggressively, putting pressure on most emerging market currencies to depreciate,” he continued.

He praised recent government decisions, such as ending petroleum subsidies, and claimed that these actions had made it possible to finish the IMF loan programme. Pakistan’s external financing requirements for FY23 will be met thanks to significant additional funding from external sources, which will be stimulated by the anticipated conclusion of the ongoing IMF review.

Then, during the course of FY23, rupee pressures should ease and the SBP’s FX reserves should gradually resume their prior upward trajectory.

According to him, monetary tightening and fiscal consolidation will cause GDP growth to moderate to 3–4 per cent in FY23, helping to close the positive output gap and lessen demand-side pressures on inflation.

The acting governor SBP stated that, according to the MPC’s baseline outlook, headline inflation is likely to remain high in FY23, hovering around 19–20 per cent, before dropping sharply to the target range of 5–7 per cent by the end of FY24, driven by stringent policies, a normalisation of global commodity prices, and advantageous base effects.

July 8, 2022
Dr Murtaza Syed assumes charge as the new Governor State Bank of Pakistan

With effect from May 5, Dr Murtaza Syed, the senior-most Deputy Governor and a former Deputy Resident Representative of the International Monetary Fund (IMF), became the new acting Governor of the State Bank of Pakistan (SBP).

Prior to this, the federal government named Dr Syed as the Deputy Governor of the SBP for three years on January 27, 2020.

Dr Syed has taken up the position in light of Section 10(2) of the State Bank of Pakistan (SBP) Act 1956 (amended), and has therefore succeeded Dr Reza Baqir, whose term ended on May 4, according to the notification.

He holds a Ph.D. in Economics from the University of Oxford’s Nuffield College and has more than 20 years of experience in macroeconomic research and policymaking, including 16 years at the IMF. He worked on IMF initiatives and monitoring of emerging markets and advanced economies such as the Eurozone, Japan, and Korea. Dr Syed also handled IMF training and technical support projects around the world, and between 2010 and 2014, he was the IMF’s Deputy Resident Representative in China.

Dr Syed started his career as a Senior Policy Analyst at the Human Development Center in Islamabad, where he worked under former Finance Minister D. Mahbub ul Haq. Afterward, he worked for the Institute for Fiscal Studies (IFS), a London-based public policy think tank, where he did research on company investment and employment behaviour, as well as evaluating Latin American anti-poverty programmes.

Read more: Pakistan’s foreign currency reserves down by $328 million

Dr Syed has produced papers on a multitude of macroeconomic topics, including fiscal and monetary policy, financial stability, economic crises, investment, demographics, poverty, and inequality, in addition to teaching public policy at the universities of Cambridge and Oxford.

May 6, 2022