Pakistan's central bank launches new scheme for freelancers, pensioners

• The enhancement would help in diverting foreign exchange flows from informal to formal channels, says SBP.
• The central bank has also revised transaction limit for pension receipts to $2,500 per individual per month.

State Bank of Pakistan (SBP) has enhanced payment limit against freelance services from $1,500 per individual per month to $5,000 per individual per month. The development aims to broaden the scope of business to customer transactions through home remittance channel.

The central bank said that the enhancement is mainly aimed at further facilitating freelancers by allowing them to route their funds through the economical and efficient channel of home remittances rather than keeping their funds with various online money transfer companies. “It would also help in diverting foreign exchange flows from informal to formal channels,” said SBP in a statement.

Furthermore, the central bank has also revised the transaction limit for pension receipts to $2,500 per individual per month.

Last week, the Monetary Policy Committee (MPC) of the central bank decided to leave the policy rate unchanged at 13.25 percent for next two months as recent developments offsetting implications for the inflation outlook.

The meeting noted that recent inflation out-turns have been on the higher side mainly due to increases in food prices, which are expected to be temporary. However, market sentiment has begun to gradually improve on the back of sustained improvements in the current account and continued fiscal prudence.

The committee also noted that the SBP's projection for average inflation for FY20 remained broadly unchanged at 11-12 percent and maintaining the current monetary policy stance was appropriate. In addition, the current stance of monetary policy and real interest rates on a forward-looking basis were appropriate to bring inflation down to the target range of 5-7 percent over the next twenty-four months.