SPB Emphasizes Trade in Own Currency to Benefit from CPEC
KARACHI: State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra during a flag-hoisting ceremony at the main SBP building here on Friday emphasized the importance of trade in own currencies to take benefit of the China-Pakistan Economic Corridor.
He said Pakistan’s banks had made arrangements for the businessmen to open letters of credit in China.
To a question about devaluation of the Chinese currency, Wathra said Chinese economy had an ideal rate of growth, which could easily absorb the devaluation, meaning that exports would not suffer.
Referring to the next five-year financial strategy called SBP Vision 2020, which was announced on the occasion, the central bank governor said the bank framed the financial strategy every five years and to make the plan more effective, certain safeguards had been included.
The safeguards would prevent any change in SBP leadership from interfering with the vision.
“Last five-year financial strategy was also good, but it failed to achieve the desired result due to changes in the SBP leadership over the period,” he elaborated.
“A strong economic system based on strong institutions is the key to progress. No nation can hope to grow without a robust financial system and powerful economy. Despite challenges, Pakistan has managed to establish a central bank and a viable economic system early on. Although Pakistan’s economy has had many peaks and troughs and has even undergone crises, I believe there is still an enormous potential for growth and the economy is now headed in the right direction.”
Wathra said under the Vision 2020 the focus would be on financial inclusion as he regretted that only a small proportion of 34 million out of the total population of 180 million was part of the financial system.
“However, with the launch of branchless banking, around eight million new account holders are expected to be part of the system in coming days.”
Another measure to promote financial inclusion would be to implement NFIS. It would create the foundation for the SBP, the government and the private sector to implement a comprehensive set of coherent and sequenced reforms.
The Vision 2020 envisages activities around six strategic imperatives including enhancing the effectiveness of monetary policy, strengthening the financial system stability regime, improving the effectiveness/ fairness of the banking system, increasing financial inclusion, developing robust payment systems and strengthening the SBP’s organisational efficiency.
The SBP governor emphasised the need for more efforts on the part of banks and further incentives to encourage people to deposit their savings and be part of the financial system.
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