Monetary policy contradicted Govt’s economic victories
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Costly credit to hinder benefits of GSP Plus
The Pakistan Economy Watch (PEW) on Wednesday said State Bank’s monetary policy has disputed recent economic successes of the government.
Government, masses and the business community has been celebrating the fall or dollar against local currency while the SBP’s policymakers have indicated it insufficient to cut key policy rates, said Dr. Murtaza Mughal, President PEW.
He said that the central bank’s pessimism will have a negative impact on the sentiments of the business community and the overall investment climate.
How can exporters benefit from trade relaxations of the European Union if they cannot get cheap credit from the banks, he questioned, adding that reduced exports will have a negative impact on efforts to reduce trade deficit.
Dr. Murtaza Mughal said that the SBP has overlooked some facts that will hurt efforts of economic revival and industrial expansion by the government and business community.
He noted that inflation and deficit has been steadily declining, foreign and local investment in stock market has been picking up, local currency and forex reserves have gained strength while IMF as well as business community is confident of a turn around.
The SBP policy has indicated that these developments are deemed insufficient by the SBP which is beyond understanding as well as unfortunate, said Dr. Mughal.
He rejected the notion that the SBP has adopted a justified stance as structural reforms to handle the fundamental weaknesses in the economy still remain unaddressed.
