Covid-19 challenge: Timely, calibrated economic response articulated: SBP chief

KARACHI: State Bank of Pakistan (SBP) Governor Dr Reza Baqir Friday said that the federal government and the central bank gave a timely and calibrated economic response during Covid-19 without compromising buffers.

He was addressing the 17th Annual Excellence Awards Ceremony, organized by CFA Society Pakistan at a local hotel here. Sharing the details of the government efforts during Covid-19, the governor SBP said Ehsaas Cash Program was introduced to help the needy of the country.

He said the government had also accelerated tax returns to support the business activities. He said that monetary authorities worked hard to provide support to the economy and also minimized the liquidity problem. He said the central bank tried to manage the exchange rate to the best possible level. He said the SBP had also introduced a finance scheme to on minimum 3 percent to avoid layoffs in business organizations.

Dr Baqir said economic activity indicators are picking up and the banking sector is likely to remain resilient.

"Since the start of the reform program, and despite Covid-19, the SBP's foreign exchange reserves have risen 63 percent and forward liabilities fallen 27 percent," he added.

He said an increase in the SBP's foreign exchange reserves of 4.8 billion dollars during FY 2019-20 was achieved despite net retirement in official borrowings.

After a temporary deviation due to Covid-19, he said, fiscal indicators are expected to return the previously envisaged path. He said business confidence has recovered to pre-Covid levels and is reflected in rising manufacturing activity.

"Low margin costs and a sizable output gap are expected to keep inflation in check," he maintained. He said Pakistan is forecast to grow at around 5 percent over the medium term, or around 3 percent on per capita term. "We are currently optimistic about our good economic future," he said, hoping that the world would find a way out to overcome Covid-19 crisis.

During the ceremony, a recorded message of President & CEO, CFA Institute Margaret Franklin was also presented. Earlier, in his address of welcome, CFA Society President Muhammad Asim congratulated the winners of the CFA Excellence Award.

Copyright Business Recorder, 2020