Governor Reza Baqir briefs IMF team on SBP's reform programme

KARACHI: A delegation of the International Monetary Fund (IMF) led by Director Middle East and Central Asia Department Jihad Azour called on State Bank of Pakistan Governor Dr Reza Baqir here on Thursday.

He was accompanied by IMF Mission Chief to Pakistan Ernesto Ramirez Rigo, Resident Representative of IMF for Pakistan Teresa Daban Sanchez and Special Assistant to the Director of the IMF’s Communications Department Olga Stankova.

The delegation also met with the senior management of the central bank.

The governor briefed the delegation on SBP’s outlook on the economy, noting that the country has embarked on its home-grown economic reform programme. He said he looked forward to a continuing fruitful partnership with the IMF and other stakeholders in the international financial community to support this reform programme.

He observed the transition to a market-based exchange rate system, building foreign exchange reserves, and bringing down inflation were key elements of the SBP’s reform programme to restore financial stability and lay the foundations for sustainable and shared growth.

The initial results from the reforms were encouraging, Dr Baqir said, adding the earlier volatility in the exchange market and associated uncertainty had subsided and that confidence was slowly improving.

“Inflation had risen due to economic imbalances accumulated from previous years but inflationary pressures were expected to recede in the second half of the current fiscal year,” he said.

Nevertheless, he emphasized, these were the early stages of the reform process and it was essential to sustain the reform momentum and to keep policies focused on securing stability and promoting sustainable and shared growth.

Mr Azour shared his views on how central banks in the region were responding to the challenges being faced by them particularly with regard to capital flows, the role of technology, and the role of central banks in economic management, amongst other areas. He said he looked forward to a continuing partnership with the State Bank.