22/03/2015 06:31 AST
Pakistan's central bank cut its key interest rate by 0.5 per cent on Saturday in a bid to give the country's improving economy further momentum.
"The central board of directors has decided to reduce the policy rate by 50 basis points from 8.5 per cent to 8.0 per cent," the Central State Bank of Pakistan said in a statement.
The interest rate reduction comes as inflation sits at eight percent, down from a high of around ten percent last year.
On Saturday, the bank projected that inflation would fall to as low as four per cent by the end of this fiscal year on June 30.
It also expressed hope that Pakistan's GDP growth rate would surpass the 4.4 pe rcent recorded in the previous financial year.
The central bank noted that the economy was now on a more stable footing and was benefiting from the drop in world oil prices.
"This current macroeconomic stabilisation has thus opened a window of opportunity to gear up reforms to ensure improvement in the economy are sustainable," it said.
New aviation policy
The government of Pakistan on Saturday launched what it called a "liberal, bilateral open skies national aviation policy", announcing various incentives to investors - among them is zero taxation on investments in the sector.
Under the National Aviation Policy 2015, launched by Prime Minister Nawaz Sharif, paid-up capital for an airline operations has been enhanced from Rs100 million ($1 million) to Rs500 million ($5 million) with an aim to attract financially-sound investors in the aviation sector.
A minimum of three airworthy aircraft have been fixed for domestic and five planes for international operations for any airline company to operate.
Sharif termed it "a forward-looking policy", which will attract foreign airlines and investment in the country's aviation sector.
Under the new regime, the maximum aircraft age at the time of induction has been fixed at 12 years. Any aircraft reaching the age of 20 would have to be replaced.
The government has also increased the period of aircraft on wet lease from 90 days to 180 days. However, it has put a bar on the number of wet-leased aircraft; stating that it should not exceed more than 50 per cent of the fleet capacity of the airline.
Finance minister Ishaq Dar, who was present at the launching ceremony, said that it has been decided in principle that revenues will be taxed but, there would be no taxes on investments in the sector.
The final decision will be taken in the next budget due in June this year, he added. Captain (Retired) Shujaat Azeem, Special Assistant to Prime Minister on Aviation, delineated the salient features of the policy, which included improving aviation safety and security oversight, level playing field for national airlines, open sky policy on principle of reciprocity and outsourcing terminal side of airports.
It also included making safety Investigation Board independent, establishment of cargo villages, providing incentives on socio-political routes and building state of art infrastructure at all airports.
He said the government has tried to give top priority to safety and security of passengers, while making travel affordable and easier.
In order to ensure effectiveness and oversight of aviation safety and security, regulatory and service provider functions would be made independent of each other in both Pakistan Civil Aviation Authority and Airports Security Force.
Safety Investigation Board would be made independent and report to Minister of Aviation to ensure that findings and safety recommendations of an investigation remain unbiased.
According to the draft of the policy, airport infrastructure shall also be modernised to meet future needs of aircraft, passenger and cargo traffic. It includes refurbishment of airport buildings and rehabilitation of airside infrastructure.
The Gulf Today
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