First time ever Forex rates movement is both ways – SBP Governor informs foreign investors at OICCI

Karachi: In an interactive session with leading foreign investors, members of the Overseas Investors Chamber of Commerce and Industry (OICCI), Dr Reza Baqir, Governor of State Bank of Pakistan shared an overview of the current Economic Outlook of Pakistan and informed that “since, June 2019, Pakistan has transitioned to a market-based exchange rate regime, resulting for the first time ever in an orderly two-way movement of exchange rates in the country, which has led to a significant shrinking of the current account deficit, and better fundamentals facilitated capital inflows.

The fiscal deficit narrowed to 3.8% of GDP in Jul-Mar FY20 with the current account balance in surplus for the first time since 2016”.  He added ‘a year ago SBP was being perceived as inflicting tough stabilization measures after Pakistan had successfully started an economic reform program to address external and fiscal imbalances and later after the onset of COVID-19 the Government and central bank gave a timely and calibrated economic response without compromising buffers and as a result today the focus is on economic growth of the country”.

Dr Baqir also shared that “overall PKR 1.73 trillion or 4.1% of the GDP of Pakistan was injected by SBP in the economy to support individuals and businesses during COVID-19 through various proactive measures, including dramatic reduction in interest rates from 13.25% to 7%, loan deferment, employment support and Rozgar Schemes”. He further added ‘SBP is taking appropriate and timely actions to address the ever changing economic environment’ President OICCI, Haroon Rashid highlighted the significant economic contribution of foreign investors at OICCI, who are among the largest economic stakeholders and have invested over $ 16 billion in the past eight years and continue to have a positive view of the opportunities for investment despite the ongoing challenging economic environment in the country.

OICCI shared with Dr Reza Baqir the key concerns of OICCI members, including delays in approval of forex payments and cumbersome documentation requirements and sought the Governor’s support in the light of SBP policy to facilitate FDI through improving Ease of Doing Business in Pakistan. Dr. Reza Baqir appreciated the contribution of OICCI members to the national exchequer and encouraged all members to figure out ways to increase exports and adopt import substitution practices, as it was a critical step towards moving the country out of poverty. “SBP is moving towards digitalization of payment processes and proactive engagement that will address the major issues systematically and facilitate the business community,” informed the Governor.

Dr. Reza also mentioned that through an online case look-up portal, it is now possible for companies to monitor the progress of their respective cases submitted to SBP with increased transparency. He agreed on the need for continuous dialogue with the OICCI members and invited the OICCI members to meet the SBP leadership at regular intervals for timely resolution of their issues.

While concluding the session, Haroon Rashid commented “OICCI members appreciated the SBP efforts towards continuous improvement in the economy”, and presented a comprehensive list of recommendations to facilitate ease of doing business in Pakistan.

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