Irfan Aligi
Karachi
Governor State Bank of Pakistan (SBP) Dr Baqar Raza has said that Pakistan’s future is brighter but due to certain temporary compulsions, dearness rate might go a bit up and in order to curb the escalating prices of common commodities, it was inevitable to raise the interest rate. There are public complaints regarding excess receipt of exchange rate by the commercial banks and the SBP is closely monitoring this situation and would soon take measures to address the situation.
He said that trade deficit was almost zero in 2015 and reserves were in good position but with the advent of the year 2016, the trade deficit started to rise up and resaves started to deplete due to lack of adjustment of exchange rate. Then the current account deficit had escalated to the tune of US$2 billion per month but after the exchange rate was changed, the current account deficit stopped exceeding the limit and it was confined to a declining position and thus it remained half of the previous rate, say, US$ 1 billion a month.
Dr Raza said that today, the open market is determining the actual currency rate and this past June, the reserves reached US$ 7.2 billion. He said that there is still an imbalance in earnings and expenditures of the government and Pakistan’s ‘Tax to GDP’ ratio is also very low.
The SBP Governor said that the IMF was the last option for Pakistan after friendly countries had parted ways in Pakistan’s hard times. It is not the sum that the IMF gives as loan but the IMF’s signals that determine the recovery of the loan given to any country. IMF does that thing in order to ensure the recovery of the given money to any country, he added.
