Amendments in SBP Act

Like many other central banks, the State Bank of Pakistan also has the dual responsibility of price stability and growth promotion. However, problems show up when these functions contract each other, leading Governor into a political situation. Like Ishrat Hussain, the former Governor, promoted growth for political reasons that resulted in an inflationary crisis. The succeeding Governor then had to take countermeasures to handle that mess. Currently, as part of the ongoing program, the IMF is pressurizing the State Bank to limit its role to price stability only. But the State Bank can't decide on its own. The amendments in the SBP Act must be done through consensus with political leadership. Till then, the State Bank must balance between the two functions.

Summarized from 404 words to 122

Detailed Post can be found at SBP Act


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