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Get the latest State Bank of Pakistan (SBP) news, monetary policy updates, exchange rates, banking regulations, and economic insights.

  • Foreign direct investment increases by 66% in July – January

    Foreign direct investment increases by 66% in July – January

    KARACHI: The inflows of foreign direct investment (FDI) into Pakistan has increased by 66 percent during first seven months (July – January) of 2019/2020, State Bank of Pakistan (SBP) said on Tuesday.

    The inflows of FDI during the period under review increased to $1.56 billion as compared with $944 million in the corresponding period of the last fiscal year.

    The total foreign private investment during July – January 2019/2020 registered 196 percent growth. The foreign private investment increased to $1.58 billion as compared with $535 million in the same period of the last fiscal year.

    The flow of portfolio investment into the capital market increased by 105 percent during the period under review. The capital market witnessed inflows of $21.5 million during July – January 2019/2020 as compared with outflow of $409 million in the corresponding period of the last fiscal year.

    The total inflows of foreign investment has been recorded at $3.42 billion during the period under review. The main source of this investment can be attributed to foreign investment in debt securities.

    The inflow of debt securities during first seven months of current fiscal year was at $1.84 billion.

  • Fiscal reforms to help Pakistan generate funding to meet SDGs targets: IMF official

    Fiscal reforms to help Pakistan generate funding to meet SDGs targets: IMF official

    KARACHI: The ongoing fiscal reform in Pakistan will help the country to generate funding to meet Sustainable Development Goals (SDGs) targets under the UN 2030 agenda, said Athanasios Arvanitis, Deputy Director of the International Monetary Fund (IMF).

    Referring to the IMF program with Pakistan, Arvanitis remarked that it is important for the government to focus on meeting the Sustainable Development Goals (SDGs) under the UN’s 2030 Agenda.

    He noted that ongoing fiscal reforms will not only put Pakistan’s public debt path on a sustainable footing but also build the foundation for providing crucial funding to meet these targets.

    He was addressing a seminar on ‘Managing Crises in Emerging Markets’ hosted by State Bank of Pakistan (SBP) a day earlier, a press statement issued on Saturday.

    Athanasios Arvanitis highlighted some of the main similarities of crises across emerging markets, notably the role typically played by elevated levels of debt, high public and external deficits, inflexible exchange rates, lack of competitiveness, low saving and investment, and maturity and currency mismatches.

    Despite these similarities, he emphasized that there was no one-size-fits-all model for managing crises. Instead, the IMF focuses on different dimensions while assisting a country in developing a homegrown stabilization program.

    The approach emphasizes the need to diagnose the roots of a country’s crisis, trends and developments in the balance sheets of various economic agents and their interconnectedness, and country-specific dynamics that affect the political economy of reforms. In terms of designing stabilization programs, Arvanitis stressed the importance of country ownership and measures to provide support for vulnerable segments of the population.

    He also drew parallels for Pakistan from the experiences of managing crises in other emerging countries.

    Referring to the IMF program with Pakistan, Arvanitis remarked that it is important for the government to focus on meeting the Sustainable Development Goals (SDGs) under the UN’s 2030 Agenda. He noted that ongoing fiscal reforms will not only put Pakistan’s public debt path on a sustainable footing but also build the foundation for providing crucial funding to meet these targets.

    In his welcoming remarks, the Governor SBP, Dr. Reza Baqir, stated that the objective of holding the seminar was two-fold. First, to demonstrate that, in addition to its mandate of formulating monetary, exchange rate and financial stability policies, SBP endeavors to facilitate constructive debate on economic issues and is open to diverse points of view. Second, to highlight that Pakistan is not unique and there are many other emerging economies that have also faced economic crises and undergone difficult adjustments.

  • Pakistan’s forex reserves increase by $91 million

    Pakistan’s forex reserves increase by $91 million

    KARACHI: Pakistan’s liquid foreign exchange reserves have increased by $91 million to $18.735 billion by week ended February 07, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $18.644 billion by week ended January 31, 2020.

    The foreign exchange reserves of the central bank increased by $157 million to $12.431 billion by week ended February 07, 2020 as compared with $12.274 billion a week ago.

    However, the foreign exchange reserves held by commercial banks fell by $66 million to $6.304 billion by week ended February 07, 2020 as compared with $6.37 billion a week ago.

  • Remittances increase to $13.3 bn in seven months

    Remittances increase to $13.3 bn in seven months

    KARACHI: The overseas Pakistani workers have sent $13.3 billion as remittances during first seven months (July – January) of 2019/2020, showing 4.1 percent growth when compared with same period of the last fiscal year.

    The overseas Pakistani had sent $12.774 billion in the first seven months of the last fiscal year, State Bank of Pakistan (SBP) said on Wednesday.

    The remittances during January 2020 were $ 1,907.3 million, shows an increase of $163.2 million or 9.3 percent growth over remittance received during corresponding month of 2019 $1,744.1 million.

    During January 2020, larger amounts of Workers’ Remittances received from Saudi Arabia, UAE, USA and UK with US $ 433.4 million, US $ 395.5 million, US $ 335.1 million and US $ 299.1 million recorded a decline of 8.4 percent, 7.5 percent, 6.3 percent and 7.9 percent respectively as compared to December 2019.

  • SBP enhances payment limits to $25,000 against freelance services

    SBP enhances payment limits to $25,000 against freelance services

    KARACHI: The State Bank of Pakistan (SBP) on Wednesday enhanced payment limits against freelance services from $5,000 per individual per month to $25,000 per individual per month.

    The central bank in a statement said that in order to broaden the scope of business-to-customer transactions through home remittance channel it had enhanced payment limits against freelance services in computer and information systems and other freelance services from $5,000 per individual per month to $25,000 per individual per month.

    The enhancement in limit will facilitate freelancers to route greater value of funds through a more economical and efficient channel of home remittances and help in receiving foreign exchange flows through formal banking channels in the country.
    This would also enable freelancers to expand their business/ operations and engage new freelancers to join the workforce.

    This is expected to create employment opportunities and increase foreign exchange earnings of the country.

    While Export of Services has been growing in double digits, (10.5 percent rise registered in January, 2020), this enhancement of limits for freelancers shall further accelerate growth in Export of Services in the months ahead, the SBP added.

  • Bearer bonds withdrawal documents Rs243 billion

    Bearer bonds withdrawal documents Rs243 billion

    KARACHI: An amount of Rs243 billion has been documented by people through surrendering bearer prize bonds of Rs40,000 denomination.

    According to official statistics, the investment in unregistered prize bonds of Rs40,000 denomination fell to Rs14.55 billion by December 2019 as compared with Rs258 billion in May 2019.

    The government on June 24, 2019, announced to discontinue the circulation of Rs40,000 denomination national prize bonds.

    In compliance to the government announced the State Bank of Pakistan (SBP) also issued instructions to banks. The central bank issued a procedure for the banks to facilitate the general public in exchanging the unregistered prize bonds with three different modes.

    The SBP said that the bearer prize bonds of Rs40,000 cannot be exchanged against cash. However, it can be redeemed against registered prize bonds or can be converted into national saving schemes or face value (direct transfer to the bank account of bond bolder).

    4th draw of Rs25,000 premium prize bonds announced

    The SBP asked the banks that such prize bonds would not be sold after June 24, 2019, and will not be encashed/redeemed after March 31, 2020. No further draws of Rs40,000 denomination national prize bonds shall be held.

    Due to the replacement of the bearer prize bonds of Rs40,000 denomination, the total investment in prize bonds fell to Rs718.38 billion by December 2019 as compared with Rs951.64 billion in May 2019.

    The bearer papers have been known as a parking lot for the undocumented economy. Therefore, the government launched registered prize bonds of Rs40,000 denomination in March 2017 which could be purchased against certain requirements including Computerized National Identity Card (CNIC) and a valid bank account.

    Till May 2019 the total investment in premium prize bonds was Rs6.17 billion. But after the restriction imposed on bearer bonds the investment into registered prize bonds increased to Rs17.71 billion by the end-December 2019.

    According to the SBP, the bearer instrument can be exchanged in savings schemes such as Special Saving Certificates (SSC) or Defence Saving Certificates (DSC). While the third mode of exchanging the bearer bonds was direct transfer to bank accounts.

    19th draw of Rs40,000 premium prize bonds announced

    The government is intended to transform all the bearer prize bonds into registered scrips. In this regard, the Central Directorate of National Savings in collaboration with SBP is planning to issue scripless registered prize bonds amongst all denominations with objective to document the economy.

  • Pakistan’s forex reserves increase to $18.644 billion

    Pakistan’s forex reserves increase to $18.644 billion

    KARACHI: Pakistan’s liquid foreign exchange reserves increased by $282 million on a weekly basis to $18.644 billion by week ended January 31, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $18.362 billion a week ago on January 24, 2020.

    The official reserves of SBP increased by $359 million to $12.274 billion by week ended January 31, 2020 as compared with $11.915 billion a week ago.

    The reserves held by commercial banks witnessed decline by $76 million to $6.37 billion as compared with $6.447 billion a week ago.

  • Bank holiday announced on Kashmir Day

    Bank holiday announced on Kashmir Day

    KARACHI, February 4, 2020 – In a significant move reflecting solidarity with Kashmiris, the State Bank of Pakistan (SBP) has declared a holiday on February 5, 2020, on the occasion of Kashmir Day.

    (more…)
  • SBP takes steps to reduce cheque clearance time

    SBP takes steps to reduce cheque clearance time

    KARACHI: Addressing another gap in cheque clearing whereby it took weeks to clear cheques in far flung areas of the country, SBP has allowed the use of Pakistan Real Time Interbank Settlement Mechanism (PRISM) for the settlement of cheques, said a statement on Monday.

    This is expected to decrease the processing time for clearing of payment instruments in areas that are not easily accessible. This will also help the financial institutions in far flung areas to leverage digital channels for their clearing and settlement obligations, the SBP added.

    To further improve the digital payment services landscape in the country and promote financial inclusion, SBP has issued instructions to the banking industry for improving the acceptance of payment cards in the country.

    Specifically, SBP has taken three steps: one, the banks are now bound to offer the domestic payment scheme card, PayPak, to the customers as a first priority, whereas cards of international payment schemes like Visa, MasterCard and Union Pay may be issued on the request of the customer.

    Two, the merchant discount rate (MDR) i.e. the fee charged by banks to the merchants, will now be in the range of 1.5 to 2.5 percent. Earlier banks were allowed to charge any fee to the merchants.

    Three, the distribution of revenues generated from a merchant among the players including card issuer, card machine deploying entity and the payment scheme company, has also been rationalised to keep the incentives equitable among all the players.

    These measures are expected to increase payment card acceptance access points in the country and in turn will also help in digitizing the economy and promoting financial inclusion.

    It may be recalled that SBP launched the National Payment Systems Strategy in November 2019 and has since taken a number of steps to promote digitization of payment transactions in the country.

  • SBP fixes merchant discount rate up to 2.5% on digital payments

    SBP fixes merchant discount rate up to 2.5% on digital payments

    KARACHI: State Bank of Pakistan (SBP) on Friday announced that Merchant Discount Rate (MDR) for Point of Sale (POS) acquiring Pakistan shall be within the range of 1.5%-2.5% for both existing and new merchants.

    The following merchant categories shall be exempt from this requirement:

    Government and Utilities

    MCC 9211: Court Costs, Including Alimony and Child Support

    MCC 9222: Fines

    MCC 9223: Bail and Bond Payments

    MCC 9311: Tax Payments

    MCC 9399: Government Services (Not Elsewhere Classified)

    MCC 4900: Utilities -Electric, Gas, Water and Sanitary

    Education

    MCC 8211: Elementary and Secondary Schools

    MCC 8220; Colleges, Universities, Professional Schools and Junior Colleges

    MCC 8241: Correspondence Schools

    MCC 8244: Business and Secretarial Schools

    MCC 8249: Vocational and Trade Schools

    MCC 8299: Schools and Educational Services (Not Elsewhere Classified)

    Fuel

    MCC 5541: Service Stations

    MCC 5542: Automated Fuel Dispensers

    MCC5172: Petrolium and Petroleum Products

    MCC 5983: Fuel -Fuel Oil, Wood, Coal, Liquefied Petroleum

    The SBP said that the Interchange Reimbursement Fee (IRF) for debit and prepaid cards issued in Pakistan used on domestic POS terminals shall be capped at 0.5 percent.

    The central bank said that during the past few years, there has been considerable growth in the digital payment infrastructure of the country, especially in the number of debit cards being issued by the banks to their customers.

    Although, the Point of Sale (POS) infrastructure has also grown during the past few years, its growth has largely remained restricted to high value merchants in big cities.

    Some of the key challenges being faced by the POS acquiring industry in Pakistan include high Interchange Reimbursement Fee (IRF), lower than cost Merchant Discount Rate (MDR) to onboard high value merchants and less interest by banks in offering low cost domestic payment cards to their customers.

    The SBP said that the card issuers shall offer SBP approved Domestic Payment Scheme (DPS) Card as the default card at the time of issuance or renewal of debit cards.

    Accordingly card requesting customers shall be offered the following options in order of priority:

    Either an exclusive DPS card or a DPS card co-badged with an International Payment Scheme (IPS)

    An exclusive IPS card upon written request of the customer

    The central bank said that the instructions shall come into effect from April 01, 2020.