KARACHI: The State Bank of Pakistan (SBP) has decided to begin announcing a half-yearly schedule of Monetary Policy Committee (MPC) meetings on a rolling basis for making the process of monetary policy formulation more predictable and transparent.
In a press statement issued here on Thursday, dates for the next four meetings were also announced by SBP following international best practices. The first MPC meeting envisaged would be held on Friday, May 28, the next MPC meeting is scheduled on Tuesday, July 27 , the 3rd MPC meeting would take place on Monday, September 20. The MPC would convene the last meeting of the calendar year 2021 on Friday, November 26. It is pertinent to mention that a minimum of six MPC meetings are scheduled every year. In addition, the MPC can convene emergency meetings during the intervening period, if required.
To manage expectations of economic agents, many central banks across the globe release the schedule of Monetary Policy Committee meetings in advance, said the SBP spokesperson, adding that the practice was consistent with the objective of reducing uncertainty around monetary policy decision making, as clear communication helps to make central banks more transparent, and thereby contributes to enhancing their accountability. The central bank communication and transparency are also key for effective transmission of monetary policy decisions, he maintained and claimed that the SBP has over the years been seeking to modernise and increase transparency in the monetary policy making process, in line with international best practices.
The central bank, in 2005, began releasing monetary policy Statements while four years later, in 2009, it was decided to hold at least six meetings on monetary policy, envisaged to take place in the calendar months of January, March, May, July, September and November. It was also decided to hold a press conference to announce the monetary policy decision in the months of January and July, to supplement the Monetary Policy Statement. In 2015, after the introduction of an independent Monetary Policy Committee through an amendment in the SBP Act, two major changes were introduced to increase transparency. First, the SBP started publishing minutes of the MPC meetings on its website. Second, the voting pattern of the MPC members was also made public, it added.
The spokesperson said that the SBP in 2020, to make monetary policy communication more effective, enhanced interactions with analysts, the media, various business forums, academics, and investors through regular briefing sessions with its senior management. In January 2021, in light of the extreme uncertainty caused by the Covid pandemic, the MPC decided to provide forward guidance on monetary policy for the first time to facilitate policy predictability and decision-making by economic agents. The central bank also reiterated its commitment to continue modernising its communication in line with international best practices and evolving domestic circumstances.