Reportedly, the Finance Minister of Pakistan has been inquired by some of his fellow cabinet members if it was absolutely necessary to accept all conditions of the International Monetary Fund (IMF).
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The discussion took place when the last meeting of the cabinet to discuss the summary of the latest “The State Bank of Pakistan (Amendment) Bill, 2021” took place, in the presence of the Prime Minister.
Cabinet was briefed that the SBP is incorporated under the State Bank of Pakistan Act of 1956, giving it the authority to carry out the functions of the central bank of the country.
Previously, the Monetary and Fiscal Policies Co-ordination Board was responsible for the coordination of fiscal, monetary, and exchange rate policies as required by the situation of the country at hand, as authorized by Section 9B of the State Bank of Pakistan Act, 1956.
In March of 2020, the aforementioned amendment bill was drafted by SBP and forwarded to the Ministry of Finance. The ministry made further changes and forwarded the summary to the Cabinet Committee for Disposal of Legislative Cases (CCLC). The bill was considered by the CCLC on 5th April last year for a very brief period.
The SBP Amendment Bill, 2021, says that the central bank’s primary objective will be domestic price stability. This will be inserted as a new section 9F into SBP Act-1956.
According to the bill, supporting economic policies of the government will no longer be deemed as a primary goal of the bank, but rather will be a “tertiary objective”. On the other hand, State Bank’s governor, deputy governors, its executives, and board and committee members cannot be investigated by NAB or FIA.
However, in April last year, the CCLC deferred the approval of the bill, owing to the differences between the Ministry of Finance and SBP’s governor.
During a discussion, some of the members complained that the summary was received only the night before. Minister for Finance reassured that any reservations on the Bill would be addressed when it is presented in Parliament.
It is also said that a few of the members also questioned whether the Ministry of Finance had tried to get some leniency in favor of Pakistan, as they said not all the conditions are not supposed to be met.
The CCLC headed by Pakistan’s Law Minister has shown reluctance to accept and move forward on the amendments proposed by IMF in the OGRA Ordinance, arguing that it will deprive the government of the power to freeze or partially pass on gas price rise to the consumers.