KARACHI – Governor, State Bank of Pakistan (SBP), Dr. Reza Baqar on Mondayassured that the country has come out of the economic crises as it hasachieved economic stability including financial one, which has createdinvestors’ confidence that is very positive signal.
“Uncertainty and instability was a serious challenge to the country, whichis now over as the economic team tackled the situation very effectively.Pakistan’s future is bright,” he said while speaking at his firstinteraction with media here at the SBP Building.
He said the present government had assigned two major tasks to its economicteam that is, bringing economic stability and ensuring inclusive economicgrowth in the country; where there is improvement in the life of the commonman. The two main reasons for the economic instability were : externaldeficit and fiscal deficit. Now, these were being addressed effectively andin credible manner. The external/trade deficit situation was improving.
The official said it was a very positive development that the governmenthad pledged not to borrow from State Bank of Pakistan. Instead, he added,it would borrow from the money market. This would save State Bank ofPakistan from printing new notes which pushed inflation.
About the exchange rate, SBP Governor said a fixed rate or free floatcurrency policy were not in favour of the country. Rather, SBP had adoptedthe market-based policy for it. With increase it exchange rate, the tradedeficit was coming down.
Regarding the key interest rate, Dr. Reza Baqar said SBP’s Monetary PolicyCommittee did take into account the projected inflation before fixing it.
“We shall be fighting inflation to our best,” he reassured, adding theinterest rate was the best tool to control inflation.
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He said the state bank had to work for three objectives including financialstability, maintaining exchange rate and for sustained economic growth.
He defended the agreement being signed with IMF maintaining that it hadsent positive signals to the entire world about financial stability inPakistan that had also built confidence among the local and foreigninvestors.
“Going for IMF loan, every thing was being done in the interest of thecountry,” he said and that all IMF conditions were dully fulfilled.
He informed the media that on July 3, 2019 IMF Board of Directors’ meetingwould be held and all details would be dully published which would make thethings clear about the deal with the world credit body.
