ISLAMABAD, April 8: Prime Minister Syed Yusuf Raza Gilani on Tuesday called for lowering excessive government borrowing to reduce inflationary pressures.

“A strong banking system is an essential ingredient for a vibrant economy,” the premier said while talking to State Bank of Pakistan Governor Dr Shamshad Akhtar at the Prime Minister’s House.

He also underlined the importance of a well functioning financial sector for economic stability.

The prime minister stressed the need for adopting practical measures to effectively control inflation and prices of essential commodities, besides ensuring a sustainable economic development.

He said it was government’s priority to control inflation and price-hike.

The prime minister said that the banking sector has to cater to the needs of low-income people, small and medium enterprises, self-employed people, youth and farmers.

Micro-credit facility, he said, was an effective enabler to generate economic activities, reduce poverty and improve living standards.

“It will provide them opportunities to augment their incomes and move up the social ladder.”

He said that the banking sector also needed to increase the volume of agricultural credit to farmers.

This, he said, would lead to an increase in the yield of crop and income of farmers, thus improving the standard of living of the people in rural areas.

The prime minister said that improvement in the banking system would encourage other global banks to invest in Pakistan and it would augur well for the country.

Dr Shamshad Akhtar briefed Mr Gilani on various monetary policy measures undertaken to control inflation.

She also updated the prime minister on developments in the banking system, operations of State Bank, current foreign exchange reserves and the exchange rate situation.