‘SBP measures to stave off economic crisis’

KARACHI: State Bank of Pakistan (SBP) acting governor Dr Murtaza Syed said the central bank has taken tough measures to help stave off an economic crisis and stabllise battered rupee.

“The rupee would subside after these steps are implemented and the International Monetary Fund loan is received,” the governor told members of the Overseas Investment Chamber of Commerce and Industry (OICCI).

The OICCI members met with Dr Syed, Inayat Hussain and Sima Kamil, deputy governors SBP for a discussion on urgent fiscal and monetary policy measures that need to be taken to help stabilize Pakistan’s economy, a statement issued by the OICCI said.

“The SBP is taking tough measures and making difficult decisions to help avert the economic crisis,” Syed said.

“Global inflationary pressures coupled with a pro-cyclical expansionary fiscal policy is one of the main reasons Pakistan is at this crossroads today,” the governor said. “Once these measures are implemented and the IMF loan is received, the pressures on the economy will ease, specifically with regards to the depreciating rupee.”

Ghias Khan, president of OICCI, and Abdul Aleem, secretary general, OICCI led the discussions and raised member concerns related to the pre-approval procedure of letters of credit (LCs) for import of machinery and spare parts, timely remittance payments, approval exemptions of shipping values being too low, and other operational issues.

It was stressed upon the SBP leadership to set timelines so that the industry supply chain is not compromised.

The SBP team gave a comprehensive overview of the current economic situation and the planned strategy to tackle issues in 2023. Pakistan is primarily a consumer-driven economy with consumption driving up to 95 percent of the GDP. The SBP team was confident that Pakistan’s problems were temporary and urged the OICCI members to work on improving exports to help balance the exchange rate fluctuations and currency depreciation.

“This meeting was a much-needed first step towards the recovery of Pakistan’s economy. It is imperative that we implement cogent measures to halt our pattern of circular debt,” OICCI’s president said. “The SBP has always played a critical role in stabilising Pakistan’s economy, and I am confident that under Dr Murtaza Syed’s leadership we will be able to withstand the current economic climate while charting a path for growth.”

OICCI serves as a platform to promote foreign investments and plays a major role in the growth of commerce and industry in the country. Collectively, OICCI invested $2.4 billion last year, contributing one-third of the country’s total tax collections.