KARACHI: Autonomy of State Bank of Pakistan (SBP) would be beneficial for the economy, as developed countries have independent central banks.
These were the views expressed by famous economists and research fellow of Sustainable Development Policy Institute (SDPI) Dr Sajid Amin Javed on a webinar titled “The Autonomy of State Bank of Pakistan” organized by Department of Economics, University of Karachi and hosted by Dr. Safia Minhaj Assistant Professor, Department of Economics, University of Karachi. The webinar was attended by more than 100 students.
He said that SBP must be free from any political influences. Autonomy of SBP has become a debatable issue and its autonomy is not comparable to the independent level of any other institutions which are under the influence of treasury, he added.
However, there is a need for high accountability measures with very strong transparency even after the autonomy shall be granted. He further emphasized that governor SBP must be appointed only for one term and in any case the tenure should not be extended.
He suggested that for better result of controlling inflation, SBP should adopt “Integrated Inflation Targeting” instead of standard way of inflation targeting. Effective and well-define coordination between fiscal and monetary policy is the pre requisite to maximize economic performance, he added.
He further said that institutions such as Federal Board Revenue cannot be evaluated on similar grounds as SBP as they hold entirely different functions in the economy.
Dr. Sajid said that three main objectives that are to be achieved including price stability, which is the primary objective, secondly, financial stability and thirdly supporting growth. He discussed various mechanisms and proved that only the autonomy of State Bank of Pakistan will lead to attainment of these objectives.
The session ended by taking questions from students which were catered marvelously by Dr. Sajid and then a discussion with Dr. Safia Minhaj led to further explanations. All in all was a very informative and interactive session which has contributed in adding value to the thought processes of the students of Economics department, University of Karachi.
Copyright Business Recorder, 2021
Comments
Comments are closed.