File photo of State Bank of Pakistan Governor Jameel Ahmad
The $3 billion Standby Arrangement (SBA) inked between Pakistan and the International Monetary Fund (IMF) has alleviated short-term concerns regarding the economy’s external sector and increased foreign exchange reserves, State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Monday.
Addressing a flag-hoisting ceremony to mark Independence Day in Karachi, he said the country’s forex reserves held by the SBP were currently at $8.04 billion. Noting that the global economy had remained under pressure in recent months, he regretted that this had triggered record-breaking inflation in Pakistan. The situation, he added, was worsened due to the delay in reviving a stalled IMF program and last year’s devastating floods that had left a third of the country underwater.
Summarizing the achievements of the central bank over the past 76 years, he said chief among these was how it had gained the confidence of the public. In line with the best international practices, he said, the SBP’s Monetary Policy Committee was now an independent decision-making forum that adopted policies aimed at reducing inflation in line with prevailing economic conditions.
The central bank, said Ahmad, also kept Parliament abreast of its targets and activities through annual and biannual reports, adding it also issues a Financial Stability Review (FSR) that highlights risks facing the financial system and assesses its resilience to those risks.
The governor further noted that the SBP was making significant strides toward digital banking, green banking, and Islamic banking. He specifically referred to a recently-issued licensing and regulatory framework for digital banks in line with international best practices, growth of fintechs, and practical efforts for the transformation of the banking system into shariah-compliant banking. He said the central bank’s third, five-year strategic plan, sought to improve liquidity management, and the Shariah governance framework of the Islamic banking industry.
During his speech, Ahmad paid rich tributes to Quaid-e-Azam Muhammad Ali Jinnah and his companions for their struggle to secure an independent state for Muslims of the subcontinent. He recalled that Pakistan, as a nascent state, had endured several hostile circumstances and had been forced to rely on others for financial and banking activities. To avoid such unfavorable circumstances, he said, the SBP had been established for the economic independence of the country.