Pakistan cuts rate by 0.5 points

Updated 15 December 2012
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Pakistan cuts rate by 0.5 points

KARACHI: Pakistan's central bank yesterday lowered its benchmark interest rate by 0.5 percentage points to 9.5 percent, in the light of a fall in inflation.
Year-on-year inflation stood at 6.9 percent in November, the State Bank of Pakistan said in a statement, a faster fall than had been estimated. Food inflation dropped to 5.3 percent and non-food inflation to 8.1 percent.
"This broad based deceleration in inflation is now expected to keep the average inflation for this fiscal year (ending June 30) below the 9.5 percent target for the year," the SBP statement said.
The bank issued a warning about the country's external position, saying substantial debt repayments to the International Monetary Fund had contributed to a decline in foreign exchange reserves from $10.8 billion at the end of June to $8.6 billion.
The Pakistani rupee has fallen by 3.3 percent against the dollar since June, the bank said.
It said that "stressed external position has implications for the rest of the economy". The decline in foreign exchange reserves "is causing contraction in rupee liquidity".
"A depreciating currency is also affecting the size of the outstanding external debt in rupee terms and thus has implications for the fiscal position."
The central bank has now slashed its benchmark interest rate by 250 basis points, from 12 percent to 9.5 percent, since August.


EU could compensate firms hit by US sanctions over Iran — French minister

Updated 20 May 2018
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EU could compensate firms hit by US sanctions over Iran — French minister

  • In 1996, when the United States tried to penalize foreign companies trading with Cuba, the EU forced Washington to back down by threatening retaliatory sanctions

PARIS: France is looking to see if the European Union could compensate European companies that might be facing sanctions by the United States for doing business with Iran, said French finance minister Bruno Le Maire on Sunday.
Le Maire referred to EU rules going back to 1996 which he said could allow the EU to intervene in this manner to protect European companies against any US sanctions, adding that France wanted the EU to toughen its stance in this area.
In 1996, when the United States tried to penalize foreign companies trading with Cuba, the EU forced Washington to back down by threatening retaliatory sanctions.
European firms doing business in Iran face sanctions from the United States after President Donald Trump withdrew from a 2015 nuclear deal with Iran.
“Are we going to allow the United States to be the economic policeman of the world? The answer is no,” Le Maire told C News TV and Europe 1 radio on Sunday.
Le Maire added it was important Italy kept its EU budget commitments, in light of plans by Italy’s new coalition government to ramp up spending — which could put Rome at odds with the EU.