The Governor of the State Bank of Pakistan (SBP), Dr. Reza Baqir, is confident about soon completing the next tranche from the International Monetary Fund (IMF), reported Bloomberg.
Dr. Baqir stated, “We are quite confident that quite soon we will be able to put the delay behind us and soon announce the good news of completing the next tranche from the IMF. The IMF is important not just for the money, but also for the signal that it sends of good housekeeping on the economic policy front that catalyzes funding from other bilateral creditors as well as private capital markets”.
He admitted that the IMF-mandated measures, such as the surging prices of energy are tough and unpopular, and that they may impede the distribution of cash but that they are a standard difficulty for every country experiencing a political “situation”.
Moreover, the central bank governor has promised policy moves “on a timely basis” to maintain stability in the face of political chaos and a worsening economy. These remarks by Pakistan’s top central banker on Monday came as parliamentarians prepare to choose a new prime minister after Imran Khan was ousted in a no-confidence vote on Saturday.
Dr. Baqir told Bloomberg Television that he has “a broader message to the investor community, and that is that such political processes are not uncommon in democracies. It is important that economic policy-making institutions act on a timely basis to ensure that the goal of financial stability remains”.
He also mentioned the SBP’s decision to elevate interest rates by 250 basis points during an emergency meeting on Thursday, putting the benchmark rate at 12.25 percent. This brings the real rate (nominal rate adjusted for inflation) back into positive territory.
Dr. Baqir added that the central bank expects the economy to grow by roughly four percent this fiscal year despite the hiked interest rate.
