Coronavirus panic: SBP ready to take needed action

• 'The current market volatility in Pakistan is externally driven,' says SBP Governor Reza Baqir.
• US Fed on Sunday made another emergency cut to interest rates, slashing the federal funds rate by one percent to a range of 0-0.25 percent.

As central banks around the world have adopted measures to combat the coronavirus pandemic, the central bank of Pakistan has also stated that it would take action to support the financial markets.   

“The current market volatility in Pakistan is externally driven and the strengthening in the fundamentals of Pakistan’s economy that drove the improvement in Pakistan markets before the outbreak of coronavirus remains intact,” State Bank of Pakistan Governor Reza Baqir said in an email, quoted Bloomberg.

The outbreak of coronavirus has not been just a health emergency but a financial one as well, after global markets seem clueless against the mysterious virus resulting in loss of billions of US dollars.

The central bank “is monitoring the situation closely and remains ready to take any actions needed to address disorderly market conditions,” added Baqir.

The outflow of “hot money" has picked up momentum and divested amount reached about one billion dollars.

According to latest data released by State Bank of Pakistan (SBP) on Thursday, cumulatively foreign investors have divested some $972 million from their investments in the government securities including Market Treasury Bills (T-Bills) and Pakistan Investment Bonds (PIBs) during this fiscal year (1st July 2019 to March 11, 2020).