SBP chief calls for ef­fec­tive use of mone­tary tools

The Pak Banker - - Front Page -

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

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