Improvement in external sector visible: SBP chief

Reza Baqir says bold measures taken in recent past were painful but necessary

​ Our Correspondent October 10, 2019
Dr Reza Baqir. PHOTO: The British University in Egypt.

KARACHI: The reforms undertaken to address the macroeconomic challenges faced by the economy are now beginning to bear fruit as improvement in the external sector is gradually becoming visible, said State Bank of Pakistan (SBP) Governor Dr Reza Baqir.

During an interactive session with foreign investors at the Overseas Investors Chamber of Commerce and Industry (OICCI), the central bank governor stressed that restoration of stability would promote investment in the country and thus economic growth.

Baqir, accompanied by senior leadership of the SBP, was of the view that the bold measures taken by the central bank in the recent past were painful but necessary.

“The average monthly current account deficit, which was a prime concern for the economy, has halved,” he said. “Export volumes have started to grow and non-borrowed foreign exchange reserves have stopped declining and have begun to rise.”

He expected the inflationary pressure to recede from the second half of current fiscal year ie January 2020.

The governor appreciated the contribution of OICCI members to the national exchequer and announced various measures to further streamline the processes for improving the ease of doing business.

“The SBP is moving towards digitalisation and proactive engagement which will address major issues systematically,” he told the businessmen.

OICCI President Shazia Syed highlighted the significant economic contribution made by the foreign investors, who were among the largest economic stakeholders.

She added that foreign investors had invested over $13 billion in Pakistan in the past seven years and continued to hold a positive view of investment opportunities in the country despite the ongoing economic challenges.

The chamber also shared key highlights of its annual survey on remittances with the SBP governor and praised him for not delaying the remittance of profit to foreign investors despite extreme pressure on the foreign currency reserves in the past 12 months.

Businessmen, however, raised concern over some areas and sought the governor’s support in facilitating different matters in light of the central bank’s policies towards improving the ease of doing business in Pakistan.

OICCI members presented a comprehensive list of recommendations to facilitate the ease of doing business including the proposal for ending additional approvals for remittance and requested that an online portal should be established allowing banks to upload the request and supporting documents.

The governor promised to consider the recommendations and agreed on the need for continued dialogue with the OICCI members. He invited the managing committee to meet the SBP’s leadership at regular intervals for timely resolution of the issues.

Published in The Express Tribune, October 10th, 2019.

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