THIS refers to the report ‘New SBP amendment not linked to IMF terms: Farogh’ (Nov 18) which was related to the proceedings of the joint session of parliament which approved, among other things, an amendment to the State Bank of Pakistan (SBP) Banking Services Corporation Ordinance 2001.

The first prime minister, Nawabzada Liaquat Ali Khan, must be rolling in his grave because he never boasted ‘absolutely not’, as he knew that ‘power corrupts, and absolute power corrupts absolutely’, and, as such, he refused US President Harry Truman during his first state visit to give Washington bases on Pakistani soil and link Pakistan’s financial system with the US dollar.

Liaquat Ali Khan had the guts to demand in return from the US to declare its unconditional support for Pakistan on the Kashmir issue, and when the US refused to do so, he had shown his fist, meaning we are sovereign. He did not realise that his successors might surrender that, too.

Due to bad governance, our economic and financial policies are in a complete mess. The appointment of a qualified, experienced bureaucrat as SBP governor was a good move to streamline the national economy, but in less than two years, he was sent packing apparently under pressure from the International Monetary Fund (IMF). The incumbent immediately claimed autonomous status for the SBP, and publicly commented that he was not answerable to the government.

We now have an amendment in the name of optimising operational efficiency of private banks which are already untouchable entities. The changes made in section 28 of the ordinance, giving more protections to central bank, may actually be counter-productive and may harm the public interest, resulting in mindboggling rupee fall as it is artificially overvalued even now despite having undergone serious devaluation in recent times.

The forthcoming meeting related to monetary policy should focus on stabilising prices and developing confidence in our own currency, and not in the US dollar.

Ali Ashraf Khan
Karachi

Published in Dawn, December 6th, 2021

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