Under State Bank of Pakistan’s (SBP’s) temporary regulatory measures, banks have deferred a total of Rs. 644 billion payments of principal on loan obligations for one year to maintain banking system soundness and sustain economic activity, says the International Monetary Fund (IMF).
IMF in its updated report “Policy Actions Taken by Countries” reviewed various steps Pakistan has taken since March to deal with the COVID-19 crisis.
The economic activity worsened notably, and growth is preliminarily estimated at –0.4 percent in the fiscal year 2020. A gradual recovery is expected in the fiscal year 2021 as the economy reopens, it added.
The report stated that SBP has responded to the crisis by cutting the policy rate by a cumulative 625 basis points to 7.0 percent since March 17.
SBP has expanded the scope of existing refinancing facilities and introduced three new ones that aim at:
The State Bank introduced temporary regulatory measures to maintain banking system soundness and sustain economic activity. These include:
More recently, the bank has introduced mandatory targets for banks to ensure loans to construction activities account for at least 5 percent of the private sector portfolios by December 2021.
SBP has introduced further regulatory measures to facilitate the import of COVID-19-related medical equipment and medicine. These include: