September 30, 2019 (MLN): The Governor of State Bank of Pakistan, Reza Baqir has said that twin deficits are a major problem for the economy.
During his speech at the Institute of Business Administration on Monday, he said that the problem of trade as well as current account deficit had widened from 2014 to 2017.
Stressing upon the intensity of this issue, he said that at one point Current Account Deficit had reached $2 billion a month, which also accounts as the highest level recorded in the country’s history.
However, he assured that the deficit had now halved owing to constructive measures taken by the government.
With regards to inflation rate, SBP Governor said that the Central Bank had taken rightful measures to keep a check on it. He further stressed that only interest rate would curb rising inflation rate. Moreover, he stated that any future decisions regarding interest rates shall be taken after the announcement of inflation rate.
Sharing some insight on the stats of Savings rate, Baqir informed that Savings rate in Pakistan was recorded at its lowest as compared to peers, and went on to suggest that savings rate in Pakistan should be increased.
Speaking on the matter of exchange rate, the Governor said that exchange rate policy was changed in May, 2019 which resulted in an inflow of funds. More so, he explained that the difference between interbank and open market rate was quite low at present.
