SBP chief calls for effective use of monetary tools
in Islamabad on Wednesday, Anwar observed that we must continue to rebalance our economies to sustain growth through modulating domestic consumption, increase in trade and allow capital to flow freely between emerging and developing economies in search of better returns as against investment in debt ridden advanced economies.
He noted that a sudden drop in the growth rate in 2009 immediately after the 2008 crises was perhaps the principal reason why the D-8 Central Bank Governors in their first meeting agreed to set this meeting agenda on strengthening monetary and financial cooperation.
“The global growth is projected to further drop from 3.8 percent in 2011 to about 3.3 percent in 2012. As a result, the real GDP growth in the emerging and developing economies is projected to be further slower from 6.3 percent in 2011 to 5.2 percent in 2012. Therefore, we need continued collaboration to further strengthen our economies”, he added.
There is only one central bank in each country and therefore, it is very logical for central banks to look beyond their national borders for advice and collaboration, he said and added that in recent years, increasing globalization has further enhanced the need for central banks’ cooperation to tackle risks due to the cross border interdependencies and to make the most of emerging opportunities.
The central banks cooperation has been facilitated through collaborative multilateral forums such as the G20, the FSB and the meetings of the IMF, BIS and a number of bilateral and regional initiatives for cooperation. “The enhanced role of these forums also reflects the increasingly important role that the central banks of emerging and developing economies are playing at these international forums”, he added.
Stressing the need for strengthening cooperation amongst D-8 countries, the SBP Governor said D-8 Secretariat must be strengthened to collect and maintain information on our economies and their interconnectedness. “This would serve the dual purpose as it would provide regular updates on the state of D-8 economies and would help us in reviewing and measuring progress of our