IPRI holds conference on the role of SBP during COVID-19 crisis

"The SBP's support measures injected 5% of GDP liquidity to support jobs, health, investment and prevent bankruptcies."

The Islamabad Police Research Institute held a zoom conference to highlight the role of the State bank of Pakistan (SBP) during the COVID-19 pandemic.

During the occasion, the SBP Governor and main Speaker, Reza Baqir, highlighted how the central bank turned the situation of crisis into an opportunity. 

Baqir shared how the stabilization measures before the onset of the pandemic had put economic indicators on the right track. The two most important indicators he referred to were the current account and fiscal deficit.

Commenting on the measures taken to keep the economy afloat during COVID, the Governor said, “With falling domestic demand and inflation, the central bank aggressively reduced interest rate. Following this, the SPB cut the policy rate by 625 basis points, the highest cut in emerging markets to stimulate borrowing and avoid economic crisis.”

“The SBP’s support measures injected 5% of GDP liquidity to support jobs, health, investment and prevent bankruptcies.”

Measures introduced by the SBR were:

  1. Introduced refinance facilities for hospitals and new industrial investments.
  2. Introduced a Rozgaar scheme to prevents layoffs by financing wages and salaries of employees.
  3. Provided relief for loan restructuring to borrowers to combat economic disruptions.
  4. Introduced principal loan extension program to ease cash constraints of borrowers.
  5. The central bank reduced the policy rate by 625 basis points in a short time.

Speaking about the Rozgaar Scheme of the bank, Dr. Reza Baqir, explained how it prevented layoffs by financing wages and salaries of employees and prevented unemployment from happening at a large scale during the COVID-19 pandemic.

The Governor added, “In addition, for the first time in Pakistan’s history, the State Bank of Pakistan has been systematically promoting housing finance and construction through bank lending targets and other measures.”

SBP

‘While giving the stimulus, the reserves were preserved. Moreover, SBP reserves have risen, and public debt is contained.

SBP

The Governor concluded, “Overseas Pakistanis around the world are banking in Pakistan today. The Roshan Digital Accounts have been attracting significant inflows from the diasporas.

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