KARACHI: Governor SBP Raza Baqir on Friday said that it has been decided to maintain interest rates during the meeting of the Monetary Policy Committee, adding that the SBP has to issue further guidance.
In Geo’s program ‘Aaj Shahzeb Khanzada Ke Saath’, the SBP Governor said that further instructions have been issued to boost the confidence of traders and investors. “The Monetary Policy Committee thought of issuing further guidance because we feel confident in our economy,” he said. “Some people have reservations that after entering the IMF program, the previous steps may be repeated, but by issuing ‘Forward Guidance’, we really send the message that monitoring decisions are not made like in the past,” he said. will go. He said some decisions were made to improve the current account and the physical deficit.
Raza Baqir said that the current situation looks better than before and the monitoring committee has assumed that the interest rate will be maintained in the near future, saying that any adjustment in the interest rate will be gradual. He said the IMF has focused on physical policy, power sector reforms, SBP monetary policy, and foreign reserves. “We have improved physically and established a basic surplus before Corona,” he said, adding that “we can now move forward with IMF reforms.” He noted that the current account deficit was eliminated not through interim measures but through organizational reforms.
“The dollar is gradually strengthening and we have taken a step forward with confidence and that is why we have mentioned the dollar in the monetary policy,” the SBP governor said. He said that the second paragraph of the policy should be read carefully. “If we put dollars in the market, foreign reserves decrease,” he said, adding that reserves were 2 7.2 billion when the exchange rate was introduced, but we currently have 13 13 billion. And despite this epidemic, we can grow successfully. billion 6 billion reserves
“We have not increased our reserves through foreign loans because the improvement in aggregate reserves is also reflected in net reserves,” Baqir said. He said the investment was made through the Temporary Economic Refinance Facility (TERF) to procure local machinery and imported machinery. He said that SBP has been cooperating with other commercial banks to import machinery in a distributed manner to reduce the burden on foreign reserves. He said that even if the current account deficit increased slightly, it would not create the situation of the past.
The Governor of the State Bank of Pakistan assured the people that with the gradual recovery of the country’s economy, a small current account surplus or deficit could not be more troubling. He said that it was good to increase the import of machinery and capital goods related to LMS, cement and automobile sector. He added that earlier imports of consumer goods were increased but now the increase in imports was for machinery and capital goods and it was good for the economy. He said that due to the corona virus, people have resorted to the official method of remittances instead of using ‘hindi’, hoping that this trend would continue even after the epidemic.
Raza Baqir said that everyone is excited for ‘Roshan Digital Account’, and this will be the first time that overseas Pakistanis are coming on board digitally as 76,000 Roshan Digital Accounts have already been opened through these accounts. Has gone and 36 362 million has been transferred. He said that it has become possible for Pakistanis abroad to invest with a single click and local payments can also be digitized through an effective program. He said that the purpose of digitization is to regularize things and every payment should be made through government channels, while increasing receipts and remittances.
The governor said that the government was not borrowing from the SBP and the government had taken good steps to increase the revenue. He said it was a gross injustice that some had to pay taxes while others, who earn but do not pay taxes, said that as far as the basic balance was falling, the increase in debt was not disturbing. “The gross deficit was due to interest payments on past loans,” he said, adding that “our banks are desperately trying to issue loans to the government and that is why, in the case of banking, more on loans.” Playing more than is not a problem.
He said that if the basic balance increased, private banks would look for people to issue loans to the private sector. He said that the interest rate was decided by the Monetary Policy Committee and will continue to be so.