KARACHI: Governor of State Bank Pakistan (SBP) Reza Baqir has said that the reduction in interest rate was done keeping in view the global economic landscape and Pakistan’s statistics are strong enough to face the economic challenges ahead.
Speaking exclusively regarding the rate of interest and Pakistans economic situation, Governor State Bank Reza Baqir said that the economy, stock market and rupee were getting stronger before coronavirus and God willing, as soon as Pakistan overcomes this pandemic, the country s economy will bounce back.
Governor State Bank Reza Baqir said the country was trying its best to cope with the economic challenges caused by the outbreak and the global community stands with us in this regard. He said that the International Monetary Fund (IMF) board meeting is taking place today and it is giving Pakistan another $1.4 billion, while both the World Bank and Asian Development Bank (ADB) will also give further financial assistance.
Answering a question, Reza Baqir said that the Pakistani economy faces challenges similar to other developing countries. He said that today’s reduction in interest rate was done after studying the global economic landscape and further decisions based on solid information will be expedited.
Answering an important question, he said that the rate of inflation is expected to be 7-9% in the next fiscal year while at the end of this fiscal year, inflation will be 11%.
The Governor also said that exchange rate fluctuations are not unusual in times of uncertainty and many other countries are also experiencing similar trends. He said that our exchange rate has fallen by just 7% while exchange rates in other developing countries have fallen by as much as 11-20%.
He said that Pakistan was among the recipients of relief from G20 countries; this will ease the pressure of debt repayments and the current account deficit will also fall. Our foreign exchange reserves are at satisfactory levels after receiving assistance from global financial institutions and they will improve further after the relief from the G20 countries, he added.
Answering another important question, Reza Baqir said that the statistics of the banking sector are not a cause for concern and banks are cooperating with the SBP on current schemes. He also said that loans are being given to companies incapable of paying salaries to their employees while 80,000 people have already rescheduled loans worth Rs 20 billion. He expressed hope that the economic recovery package will prove useful and said that advantage should be taken of current State Bank schemes as they carry low interest rates.