KARACHI: Pakistan’s central bank is expected to hold its policy rate today, Monday, a Reuters poll showed, as many analysts shifted their previous view of a cut in the wake of Israel’s military strike on Iran, citing inflation risks from rising global commodity prices.
Israel said on Friday it targeted nuclear facilities, ballistic missile factories and military commanders in a “preemptive strike” to prevent Tehran from building an atomic weapon.
Several brokerages had initially expected a cut but revised their forecasts after the Israeli strikes sparked fears of a broader conflict.
The escalating hostilities triggered a sharp spike in oil prices — a worry for Pakistan given the broader impact on imported inflation from a potentially prolonged conflict and tightening of crude supplies.
Eleven of 14 respondents in a snap poll expected the State Bank of Pakistan (SBP) to leave the benchmark rate unchanged at 11 percent. Two forecast a 100 basis-point cut and one predicted a 50 bps cut.
“There remains an upside risk of a rise in global commodity prices in light of geopolitical tensions which could mark a return to inflationary pressures,” said Ahmad Mobeen, senior economist at S&P Global Market Intelligence.
“The resultant higher import bill could also threaten external sector performance and bring pressure to the exchange rate.”
Inflation in the South Asian country has been declining for several months after it soared to around 40 percent in May 2023.
Last month, however, inflation picked up to 3.5 percent, above the finance ministry’s projection of up to 2 percent, partly due to the fading of the year-go base effects. The SBP expects average inflation between 5.5 percent and 7.5 percent for the fiscal year ending June.
The central bank paused its easing cycle in March after cumulative cuts of 1,000 basis points from a record high of 22 percent, and resumed it with a 100-basis-point reduction in May.
The policy meeting follows the release a tight annual budget, which saw Pakistan raise defense spending by 20 percent but overall expenditure was reduced by 7 percent, with GDP growth forecast at 4.2 percent.
Pakistan says its $350 billion economy has stabilized under a $7 billion IMF bailout that had helped it staved a default threat.
Some analysts are skeptical of the government’s ability to reach the growth target amid fiscal and external challenges.
Abdul Azeem, head of research at Al Habib Capital Markets, which forecast a 50-bp cut, said a lower rate could “support the GDP target of 4.2 percent and reduce the debt financing burden.”
Pakistan set to hold policy rate as Israel-Iran conflict overshadows growth push
https://arab.news/pp67m
Pakistan set to hold policy rate as Israel-Iran conflict overshadows growth push
- Eleven of 14 respondents in a snap poll expected central bank to leave the benchmark rate unchanged at 11 percent
- Central bank paused its easing cycle in March after cumulative cuts of 1,000 basis points from a record high of 22 percent
UN torture expert decries Pakistan ex-PM Khan’s detention
- Khan’s party alleges government is holding him in solitary confinement, barring prison visits
- Pakistan’s government rejects allegations former premier is being denied basic rights in prison
GENEVA: Pakistan’s former prime minister Imran Khan is being held in conditions that could amount to torture and other inhuman or degrading treatment, the United Nations’ special rapporteur on torture warned Friday.
Alice Jill Edwards urged Pakistan to take immediate and effective action to address reports of the 73-year-old’s inhumane and undignified detention conditions.
“I call on Pakistani authorities to ensure that Khan’s conditions of detention fully comply with international norms and standards,” Edwards said in a statement.
“Since his transfer to Adiala Jail in Rawalpindi on September 26, 2023, Imran Khan has reportedly been held for excessive periods in solitary confinement, confined for 23 hours a day in his cell, and with highly restricted access to the outside world,” she said.
“His cell is reportedly under constant camera surveillance.”
Khan an all-rounder who captained Pakistan to victory in the 1992 Cricket World Cup, upended Pakistani politics by becoming the prime minister in 2018.
Edwards said prolonged or indefinite solitary confinement is prohibited under international human rights law and constitutes a form of psychological torture when it lasts longer than 15 days.
“Khan’s solitary confinement should be lifted without delay. Not only is it an unlawful measure, extended isolation can bring about very harmful consequences for his physical and mental health,” she said.
UN special rapporteurs are independent experts mandated by the Human Rights Council. They do not, therefore, speak for the United Nations itself.
Initially a strong backer of the country’s powerful military leadership, Khan was ousted in a no-confidence vote in 2022, and has since been jailed on a slew of corruption charges that he denies.
He has accused the military of orchestrating his downfall and pursuing his Tehreek-e-Insaf (PTI) party and its allies.
Khan’s supporters say he is being denied prison visits from lawyers and family after a fiery social media post this month accusing army leader Field Marshal Asim Munir of persecuting him.
According to information Edwards has received, visits from Khan’s lawyers and relatives are frequently interrupted or ended prematurely, while he is held in a small cell lacking natural light and adequate ventilation.
“Anyone deprived of liberty must be treated with humanity and dignity,” the UN expert said.
“Detention conditions must reflect the individual’s age and health situation, including appropriate sleeping arrangements, climatic protection, adequate space, lighting, heating, and ventilation.”
Edwards has raised Khan’s situation with the Pakistani government.
