Islamabad: Acting Governor State Bank Dr. Murtaza Syed has said that Pakistan is not in as much danger as people think, the economy is in the right direction, negative analyzes are not correct.
Speaking in a podcast on the official YouTube channel of the State Bank of Pakistan, he said that there is no doubt that the next 12 months will be very difficult for the global economy. Oil prices are increasing globally, reserves are decreasing and there is also global political tension.
He said that due to these reasons, all the countries are worried, there the inflation has reached the highest level and the pressure of this situation is more on the countries which have high debt rate.
Dr. Murtaza Syed said that however I think Pakistan is not as much in danger as people think, there are 3 reasons, firstly our debt ratio which is 70% of our GDP, Ghana, Other countries we are comparing with, like Egypt and Sri Lanka, have debt ratios of 80 percent or more of their GDP.
He said that the second thing is the rate of external debt, our external debt rate is 40 percent of GDP while this rate is higher in other countries.
“This means that our internal borrowing rates are higher and easier to manage because it is in your own currency,” he said.
Dr. Murtaza Syed said that the third thing is short-term loans, only 7 percent of Pakistan’s total external debt is based on short-term loans, this rate is quite high in other countries, this rate is 30 percent in Turkey.
He said that in addition to this, another thing is seen on what terms you have obtained this external loan, in our case only 20 percent of the loans have been obtained on commercial basis while the rest of the loan is from IMF, World Bank. taken from banks and friendly countries, so it is very easy for us to repay them compared to countries that have borrowed heavily on a very commercial basis.
He further said that another thing should be seen is how the policies are being implemented, after getting out of Corona, our economy was growing in a very good way, last year our growth rate was 6% which will be this year too
He said that it is therefore gratifying that at this time we have been able to slow down the economy, we have also started working on it, we have increased the interest rate, other countries facing similar situations. Compared to the State Bank has increased the interest rate very effectively.
Dr. Murtaza Syed said that the most important thing is that in the next 12 months the country that will have the IMF program will be safe and those that will not have it will be under a lot of pressure. A staff-level agreement is in place with F, so we’re not in as much danger as people think.
“The staff-level agreement should not be taken lightly, it is a huge achievement, it means that the IMF staff is satisfied that we have met all the conditions to complete this review,” he said. Once the staff level agreement is in place, getting approval from the board is very easy.
He said that we need foreign financing but it has to come from our friendly countries in which the IMF will also help us, these friendly countries have also helped us many times before.
He said that the IMF is well aware of how to deal with such countries where there are ups and downs in the democratic process, so it knows how to deal with Pakistan and we have also done so. All the promises made to them are being fulfilled.
Dr. Murtaza Syed said that this board meeting will also be held in the month of August, God willing, after which the whole world will see that Pakistan is moving in the right direction and people’s concerns will be removed.
In response to a question about his position as acting governor, he said that the acting governor of the State Bank has all the powers that a permanent governor has, except that he does not sign your currency notes. could do
He said that I have been holding the post of Acting Governor for almost two and a half months, during this time we have held 2 meetings of the Monetary Policy Committee, we have had 2 board meetings and I have visited Pakistan on relevant international platforms. During this time we also negotiated with the IMF and approved a staff level agreement which will be signed by me.
He said it doesn’t matter whether you are a part-time or full-time governor, a governor is a governor and he has all the powers.
He said that negative and baseless news about Pakistan’s economy is being spread on social media while there is no such thing, the purpose of this podcast was to dispel these rumours, State Bank is a responsible institution. I will say the same to the public that they should not listen to these rumours.