Pakistan has come out of financial crisis: SBP governor

Published February 19, 2019
Governor of the State Bank of Pakistan Tariq Bajwa says economic uncertainty in the country has ended. — File photo
Governor of the State Bank of Pakistan Tariq Bajwa says economic uncertainty in the country has ended. — File photo

KARACHI: Governor of the State Bank of Pakistan Tariq Bajwa has said the country has come out of the financial crisis with the help of friendly countries and the economy has been set on the right path.

Speaking at a private university in Lahore on Monday, he said uncertainty in the economy had ended. The government, he said, was on the right path and it was capable of meeting all economic challenges.

Take a look: ‘Tough measures are necessary to rescue the economy,’ says Hammad Azhar

The governor spoke about the current account deficit, which had hit the economy badly during the current financial year.

The current account deficit was the real cause of concern for the new government headed by Prime Minister Imran Khan. Mr Khan visited friendly countries like China, Saudi Arabia, the UAE, Malaysia and Turkey to seek investment and managed to get financial help to bridge the external deficit.

Mr Bajwa said a plan had been prepared to eliminate the current account deficit and the work in this regard was in progress. He said the deficit was the biggest hurdle for the country and the government was still negotiating with the International Monetary Fund for a package to minimise it.

He said the government had not crossed the limit for borrowing from the SBP. It had borrowed Rs3 trillion from the central bank and returned Rs2tr, he added.

Since the beginning of the new financial year, the government has been borrowing from the SBP for budgetary support, while it has retired loans taken from the scheduled banks. It has so far retired about $2.9tr to the scheduled banks.

The policy shows the government wants to keep the scheduled banks liquid so the private sector could borrow more from the banking system.

According to a latest SBP report, the private sector borrowing has more than doubled from July 1 to Feb 8 to Rs571 billion from Rs264bn in the same period of the last financial year.

The SBP governor said the cases involving Rs600bn were pending in banking courts. He said capacity building was being developed to deal with the huge number of pending cases and for their quick decisions.

He said the cases must be decided quickly so that the banks could use the money involved in litigation.

Mr Bajwa said the SBP had offered to bear expenses of training of judges to help the courts decide the pending cases urgently.

He said the policy to depreciate the rupee had been adopted to reduce the trade deficit, which was the main reason for high current account deficit.

Published in Dawn, February 19th, 2019

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Trump 2.0
Updated 07 Nov, 2024

Trump 2.0

It remains to be seen how his promises to bring ‘peace’ to Middle East reconcile with his blatantly pro-Israel bias.
Fait accompli
07 Nov, 2024

Fait accompli

A SLEW of secretively conceived and hastily enacted legislation has achieved its intended result: the powers of the...
IPP contracts
07 Nov, 2024

IPP contracts

THE government expects the ongoing ‘negotiations’ with power producers aimed at revising the terms of sovereign...
Rushed legislation
Updated 06 Nov, 2024

Rushed legislation

For all its stress on "supremacy of parliament", the ruling coalition has wasted no opportunity to reiterate where its allegiances truly lie.
Jail reform policy
06 Nov, 2024

Jail reform policy

THE state is making a fresh attempt to improve conditions in Pakistan’s penitentiaries by developing a national...
BISP overhaul
06 Nov, 2024

BISP overhaul

IT has emerged that the spouses of over 28,500 Sindh government employees have been illicitly benefiting from BISP....