State bank of Pakistan established in 1948 working as the central bank of Pakistan.

The bank is entrusted with the duty of regulating the issue of bank notes and keeping of reserve with a view to seeking monetary stability in Pakistan and generally to cooperate the currency and credit system of the country to its advantage.

 State

bank as a bank of issue Banker to the government Bankers bank State bank as a clearing house Advisor to government State bank as a lender of last resort State bank as a controller of credit

Monetary policy is the process by which the government, central bank, or monetary authority of a country controls (i) the supply of money (ii) availability of money (iii) cost of money or rate of interest to attain a set of objectives oriented towards the growth and stability of the economy. Monetary theory provides insight into how to craft optimal monetary policy. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values.

Developing countries may have problems establishing an effective operating monetary policy. The primary difficulty is that few developing countries have deep markets in government debt. The matter is further complicated by the difficulties in forecasting money demand and fiscal pressure to levy the inflation tax by expanding the monetary base rapidly. In general, the central banks in many developing countries have poor records in managing monetary policy. This is often because the monetary authority in a developing country is not independent of government, so good monetary policies takes a backseat to the political desires of the government or are used to pursue other non-monetary goals.

MONETARY BASE

RESERVE

REQUIREMENTS DISCOUNT WINDOW LENDING INTEREST RATE CURRENCY BOARD

GOVERNER STATE BANK OF PAKISTAN MR. YASEEN ANWAR ANNOUNCE THE MONETARY POLICY
WITH A 1.5%DECREASE IN THE INTEREST RATE

FROM 12% TO 10.5%

ELECTRICITY CRISES
INFLATION RATE DECLINING A REDUCTION IN THE MARKET PRICES FOR CUDE OIL UTILIZATION OF CREDIT BY PRIVATE BUSINESSES

President Karachi chamber of commerce and industry(kcci) Abrar ahmed has appreciated the state banks move to reduced the discount rate He said that at present, the situation is compounded because the credit of private sector is going up whereas reluctance is also observed by banks for providing financial support to industry KCCI president observed that the leadership of Businessmen Group in various meetings with highups had urged to bring down the interest rate to single digit.

Chairman All Pakistan Textile Mills Association (Aptma) Mohsin Aziz said it is a positive move towards the right direction and needed to be continued further until the lending rate drops down to single digit.
Chairman Aptma has expressed the hope that an impetus to investment and growth would have positive impact on national economy and hoped that interest rate would come down more to kick start industrial activities in the country.