The News International
Published Date: May 27, 2021
Ways to benefit economy discussed at KU webinar
An autonomous State Bank of Pakistan (SBP) would be beneficial for the economy, as developed countries have independent central banks.
These were the views of a research fellow of the Sustainable Development Policy Institute (SDPI), Dr Sajid Amin Javed, during a webinar titled “The Autonomy of State Bank of Pakistan”.
The webinar was held by hte Department of Economics, University of Karachi, and hosted by Dr Safia Minhaj, assistant professor, Department of Economics, University of Karachi. Attended by more than 100 students, Dr Javed added that the SBP must be free from any political influences. Autonomy of the SBP had become a debatable issue, and its autonomy was not comparable to the independent level of any other institutions which were under the influence of treasury, he said, stressing the need for high accountability measures with very strong transparency even after autonomy was granted.
He further emphasised that the SBP governor must be appointed only for one term and in any case the tenure should not be extended. For better results of controlling inflation, the SBP should adopt “Integrated Inflation Targeting” instead of standard way of Inflation Targeting, he suggested.
Effective and well-defined coordination between fiscal and monetary policies was the prerequisite to maximise economic performance, said Dr Javed. He said achieving price stability is the primary objective,
financial stability is the secondary objective and supporting growth is the tertiary objective. He discussed various mechanisms and argued that only the SBP autonomy would lead to the attainment of these objectives.
The session ended with taking questions from students, and a discussion with Dr Safia Minhaj led to further explanations. All in all, it was a very informative and interactive session, which contributed in adding value to the thought processes of the students of the Economics Department.