Karachi, February 22, 2019 (PPI-OT): This is with reference to the story entitled ‘Pakistan has come out of financial crisis: SBP governor’ published on 19th February, 2019 and the editorial entitled ‘SBP governor’s remarks’ published on 20th February, 2019 in an English daily.
To put the record straight, the factual position is rather different from the insinuations attributed to Governor’s interaction with the press. In fact, the conversation reported in the story and the editorial attributed to the Governor SBP are misleading. We strongly urge you to visit the recording to confirm the conversation (see the link at Local Link |YouTube).
More specifically, the news items contain two contentious assertions attributed to the press conference: (i) ‘Governor of the State Bank of Pakistan Tariq Bajwa has said the country has come out of the financial crisis with the help of friendly countries and the economy has been set on the right path,’ and (ii) a different editorial goes on to comment ‘The State Bank Governor raised more than just a few eyebrows when he said at a private event that Pakistan’s economy had come out of a financial crisis.’ Both these assertions are unfactual and rebutted by SBP. The Governor Tariq Bajwa never used the term ‘financial crisis’ during the entire press conference.
Further, assuming these premises the editorial goes on to claim inconsistencies between SBPs monetary policy statements and its quarterly/annual reports, and the purported statements of the Governor at the press conference. You will appreciate that publishing a story and editorial without fully verifying the facts, particularly during the times in which important stabilization measures are working their way through the economy, weakens public confidence while unhinging expectations.
On the question of whether the Federal Government had crossed the limit set for SBP borrowing, the Governor had only clarified that that the law i.e. Section 9C of the SBP Act does not set any limit on Government borrowing from the State Bank. He further explained that under the said law GOP was required to bring its SBP borrowing to zero at the end of each quarter and if it does not then the Finance Minister has to make a statement on the floor of the house. This was a clarification given on a specific question and in no way changes the SBP stance that borrowing from SBP is more inflationary than borrowing from commercial banks.
For more information, contact:
State Bank of Pakistan (SBP)
I.I. Chundrigar Road, Karachi, Pakistan
Fax: +92-21-39212433 – 39212436