In its latest Financial Stability Review for the calendar year 2016, the State Bank of Pakistan has declared the country’s financial sector as stable as risks remained subdued and resilience remained intact during the calendar year 2016.The analytical review sees improvements both in the financial and non-financial sectors, but points out that low to moderate level risks in the short-to medium-term could emerge. However, on its part, the State Bank is required to strengthen its regulatory and monitoring framework, improve its efficiency, ensure transparency in payment system, and reinforce corporate governance regime for a better outlook for the current financial year. The report expects positive outlook of the financial sector for the current fiscal year despite risks and measures are being taken to enhance consumer protection. The Pakistani policymakers should also note that various segments and regions of the world economy are experiencing low economic growth which could have direct impact on the exports and imports of Pakistan. It should also be noted that Pakistan is close partner of the Gulf Cooperation Council and political turmoil in Syria, recent tension between Qatar and other gulf countries as well as change of business rules by the new administration of the United States will have negative impacts on the business and trade in Pakistan.
It is yet to be seen how the central bank will react to the recent changes in the world financial order as Britain has already parted ways with the European Union. If the non-state actors are active in terrorist activities, the financial terrorists are also active to damage the national economy. The recent fall in Pakistani rupee should be an eye opener for the government which had failed to curb such elements at the initial stage. The depreciation of the rupee would bring the gains of the economy down to earth and it necessary for the central bank, Finance Division and all related government departments to work in tandem to safeguard the financial interests of the country.
The government is expecting a conducive macro-financial environment to keep inflation at the lowest ebb and exchange rates at stable position. The economists hope the government would also put moratorium on acquiring loans from the international financial organizations. All the financial and economic matters depend on the policies and visions of the leadership and it is hoped Finance Minister Ishaq Dar will do all his best to keep the financial order intact.
