Will review interest rates after inflation rate plummets: Governor SBP, Reza Baqir

• Pakistan economy undergoing slowdown, Governor SBP admits
• Baqir informed that he has resigned from the International Monetary Fund’s (IMF) administration

State Bank of Pakistan (SBP) Governor Reza Baqir admitted that Pakistan economy was going through a slowdown phase.

He said this during Reza Baqir’s media talks in Karachi on Tuesday. As per reports, the SBP Governor said that the foreign reserves increase last week was not due to a single factor, but because of sentiment improvement and lowering forward book liabilities.

Talking about the high interest rate, Baqir said that higher interest rates were due to unabated inflation. “When inflation rate will plummet, we will review interest rates”, he said. The governor admitted that there were some structural faults behind rising inflation, which are being addressed.

Talking about Saudi oil facility, the SBP chief said that the Saudi oil facility is transparent i.e. Total imports are shown in current account, and facility is shown in financial account.

Baqir informed that he has resigned from the International Monetary Fund’s (IMF) administration, and is now only working for Pakistan. Prior to this appointment as SBP Governor, Baqir was serving in the IMF as senior resident representative to Egypt.

Earlier, it was learnt that the federal government's non-tax revenue declined sharply, i.e., 44 percent during FY19, mainly due to a steep decline in the SBP profit.

According to the SBP, the federal government's non-tax revenue stood at Rs 427.3 billion in the last fiscal year (FY19) compared to Rs 761 billion in FY18, depicting a sharp decline of Rs 333.7 billion.

The SBP profits have lately become an important revenue source for the government, as these have constituted nearly one third of non-tax revenues over the past 5 years.

On a lighter note, the SBP chief requested journalists to not ask question on prices of vegetable.