Inside the monetary policy

Sir: I would like to highlight the main objectives of the monetary policy and their implementation in Pakistan. The government and the Central Bank claim that the inflation rate in Pakistan is currently 6.5 to 7% where as, actually it is 11-12%. The inflation criteria set by the government do not include prices of gas, petrol and power. Apparently, the rationale behind this is that the above commodities are not utilised by a poor man.

Another vital objective is to achieve the maximum level of employment. The recent press release by the Asian Development Bank indicates a growing rate of unemployment in Pakistan.
The interest rates have increased three-fold during the last two years i.e., from 6% to 18%. Due to this production is declining and industries are increasingly shifting to Bangladesh and Dubai. Textiles mills are closing down and exports are rapidly decreasing. The only investments (local or foreign) are in the stock market or real estate. There is no boom or quantum leap in the fundamentals of the country’s industries and corporations. Had there been the acclaimed boon in our industrial sector we would have at least witnessed industrialisation of the country besides other indicators.
It appears that we have accepted this kind of manipulation either because of vested interests or because of criticism falling on deaf ears.
INAYAT SHEIKH
Via email