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Pakistan came out of financial crisis: Governor SBP

KARACHI: Governor of the State Bank of Pakistan Tariq Bajwa has said that the country has successfully come out of the financial crisis it was faced with.

Speaking at a private university’s function in Lahore, the central bank head said that Pakistan had overcome the imminent balance of payment crisis with the help of friendly countries.

He added that at present the economy has been set on the right path as uncertainty in the economy had ended. The government, he said, was on the right path and it was capable of meeting all economic challenges.

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

Bajwa said that a plan had been worked out to control the current account deficit which is being implemented. 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 clarified that the government had not crossed the statutory 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.