Pakistan’s top economic experts are of the view that prohibition on the government’s borrowing from the central bank under the State Bank of Pakistan (SBP) Amendment Bill 2021 will create practical difficulties.
However, they said the bill is a step in the right direction because the SBP should have full independence in the formation of monetary policy and exchange rate adjustments to avoid economic losses.
Noted economist Dr. Ashfaque Hasan Khan told WealthPK in an interview that lawmakers should play their role in improvement of the bill. “Our country is being run on deficits due to a big gap between revenue and expenditure.
We collect less revenue than our expenditure. So, we are in deficit every month. In these circumstances, if the government will not be able to borrow from the SBP then it will be forced to borrow from the commercial banks.
Due to this factor, commercial banks will not lend to the private sector which will suffer as a consequence,” he said.However, Dr. Sajid Amin Javed, Chief of the Policy Lab from Sustainable Development Institute (SDPI), told WealthPK that the bill is a step in the right direction but pushing it through legislation under the pressure of IMF conditions will distort its effectiveness.—INP
