The Monetary and Fiscal Policies Coordination Board (MFPCB) is scheduled to meet on Monday (today) to review the economic conditions, growth strategy as well as policy rate, official sources revealed to Business Recorder.
The MFPCB will meet under the chairmanship of Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh to discuss and suggest measures aimed at improving coordination between the monetary and fiscal policies.
Other members of the Board are: Governor State Bank of Pakistan (SBP), Adviser to Prime Minister on Commerce and Industry and Deputy Chairman Planning Commission.
The last meeting of MFPCB was held in August 2019. A meeting was earlier scheduled for last week but postponed due to unavailability of Adviser to PM on Finance.
Sources in the Finance Ministry revealed that the Ministry would inform the Board about the fiscal side, revenue and current account deficit. The Board would deliberate upon the measures to reduce the current account deficit as well as measures to generate revenue and propose measures to meet fiscal requirements.
Sources further said that Ministry of Commerce would apprise the Board about the current trade figures, exports and imports and measures to reduce the trade deficit. The Board would be informed about the measures taken to increase exports and the outcome so far as well as future line of action.
Deputy Chairman Planning Commission will apprise the MFPCB on the growth strategy. The measures required for accelerating the growth rate would come under discussion, sources said adding that SBP would inform the Board about the monetary policy and suggest whether to maintain the current rate of 13.25 percent. The Board may come up with suggestions/proposals regarding the policy rate and its impact on inflation.
The State Bank of Pakistan governor, Reza Baqir on Tuesday informed the Public Accounts Committee (PAC) that the Bank may consider cutting the policy rate following a decline in inflation. There are speculations that as headline inflation has come down from 14.6 percent in January to 12.4 percent in February 2020, the Bank may review the policy rate in the next monetary policy committee meeting.
Senior officials revealed that the MFPCB coordinates monetary and fiscal policies as well discusses the implication of the policy rate, but has no mandate to recommend a cut or increase in the rate. The Monetary Policy Committee (MPC) of SBP has the mandate to take any decision in this regard.
The MFPCB was constituted for the purpose of setting up an institutional mechanism to ensure coordination between the fiscal and monetary policies.
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