State Bank of Pakistan (SBP) Governor Reza Baqir in an interview to a media outlet has defended the decisions of the federal government, saying that they were all for the good of the country and will help stimulate the economy to grow.
He said that with the preemptive rate hike and currency devaluation the government has complied with all the prior actions advised by the IMF. “We are done with it. The government has taken almost all the difficult decisions, and there is no cause for further uncertainty in the financial markets. We have taken the necessary measures” he said referring to apprehensions in the market that the worst has yet to come.
Defending the widening of the tax base, facilitating exporters, and a good relationship with the international community, the SBP Governor said that Pakistan’s economy is in a relatively stable position compared to last year as the government and central bank have introduced measures aimed at fixing the fiscal and current account deficits.
“I am confident that we have achieved relative stability compared to where we were just six months ago, and that adjustments by the SBP and government are in line wth the IMF’s recommendations.”
He also pointed out the gradual move away from a fixed exchange rate regime towards a market based one, and that the SBP will continue to monitor the currency market and intervene in case of unjustified rate movements.
“With the IMF agreement in place, fund from other bilateral sources are also expected to follow which will decrease the government’s reliance on SBP to fund the fiscal gap” he said.
