State Bank of Pakistan Governor Reza Baqir has blamed an increase in power tariffs and supplyside issues as the main source of inflation in Pakistan.
Baqir, while speaking to a local media outlet, said SBP chief the Pakistani economy was moving in the right direction.
He said the autonomy of the central bank in the future would further strengthen the economy.
He said the government has no plans of increasing policy rates in the future. Talking about the higher interest rate, he said that the policy rate was not 13 per cent for the first time in Imran Khan’s government, the policy rate was kept at 13pc in 2008 and 2010 as well.
However, the government has no plans to hike the interest rate in the near future, he said, adding that if it has to increase it, it will be done in a gradual manner.
He said SBP will implement those policies which benefit the economy of Pakistan. Talking about the priorities, the SBP chief said that their focus is to save people’s jobs, adding that they will talk to the IMF keeping this in mind.
Reza Baqir said that Pakistan was forced to approach the International Monetary Fund (IMF) due to a weak economic outlook. An agreement between Pakistan and IMF was signed in May 2019.
On coronavirus pandemic, the SBP governor said that the government and the central bank had taken measures in the first and second wave of coronavirus. During the COVID-19 pandemic, he said the government had to take loans from IMF amounting to Rs250 billion.