The State Bank of Pakistan (SBP) governor is quite hopeful that the latest International Monetary Fund (IMF) loan programme will be the last one and Pakistan will not need to go back to the lender in future.
The recent structural reforms implemented under commitments made with the IMF had started providing much-needed support to the economy to enable it to stand on its own feet, he said.
“The goal is to have… foreign exchange reserves that are sufficiently high and with that we will not go back to the IMF for another programme,” Reza Baqir said at a lecture on “Pakistan Economy: Macroeconomic Challenges and Outlook” at IBA University of Karachi on Monday.
Talking about the economic outlook, he questioned whether “this will be the last IMF programme” and explained, “how Pakistan should not go back to the IMF after this programme.” Baqir said maintaining high reserves remained the most crucial challenge to the economy to get rid of the IMF in the future. The reforms introduced to determine the rupee-dollar exchange rate would help in maintaining the reserves at an optimal level, he added.
“Yes, we entrenched a market-based exchange rate system, which means the rate will be determined by the supply and demand (of dollars in the market)… which is perhaps one of the key institutional changes that have happened in the reform process,” he said.