The Governor State Bank of Pakistan, Mr. Yaseen Anwar has given hints that SBP might be punishing those money exchange companies hugely who have been involved in money market manipulation in a negative way through speculation. A formula of punishment has been worked out by experts of SBP which has also authorized the Money exchange inspectors to carefully observe the behavior of money market dealers.
He had also added, while answering a question raised at Senate’s Standing Committee during the presentation of State of economy that, “Increase in national revenues, correction in Balance of Payment and increasing credit to the private sector are some of the major challenges faced by the economy of Pakistan.” He explained that interest rate was reduced taking into account inflation and other economic and financial factors. The non-availability of the credit to the private sector by banks has led to decline in investment. While due to comfortable position at the external side has provided SBP to take risk of decreasing interest rate, in order to provide credit to private sector. He also expressed dissatisfaction on the overall economic situation of the country.
The SBP governor has said that, $1 billion remittances monthly and currency swap agreements with China and Turkey has provided support to the external account, but overall there might be uncertain situation in the second half of current fiscal year, however, it would not be prudent to comment on future without analyzing the facts and figures. He also said that two major banks have plans to bring huge investments in Pakistan. The increase in remittances through proper banking channels and various steps and measures by the regulator – SBP, have helped formalizing the informal channels. SBP has also working on devising a formula for imposing penalties on major money market players who were found in manipulating the exchange rate in a negative manner.
Responding to a question on poverty reduction and increase in employment, the governor indicated that SBP is working on improving the access to credit, which would help in reducing the poverty. SBP has also decided to work in close coordination with Securities & Exchange Commission of Pakistan (SECP) for the development of corporate debt market.