Low inflation and solid growth mean there’s no pressing need to devalue the currency in the near term, State Bank of Pakistan Governor Tariq Bajwa said in an interview.
Pakistan has allowed the rupee to weaken twice in recent months as it attempts to mend its deteriorating finances before elections due in July. Bajwa said another near-term move to devalue is unlikely.
“Not at the moment, we just did one in March so we are waiting to see its impact. If there is a requirement we will do it but I don’t see anything imminent,” he said, echoing comments by the nation’s finance minister.
The economy is facing headwinds with foreign-exchange reserves dropping at the fastest pace in Asia in the past year and current-account deficit rising by about 50 percent in the current fiscal year.
The central bank unexpectedly moved interest rates up 25 basis points in January, the first increase in more than four years, before surprising again by leaving it unchanged two months later.
Bajwa said overall growth is on track and that robust food supplies is helping to keep prices down.
“Inflation continues to be low, which is very good news,” he said. “But the pressure we see is on the current account so we are doing a balancing act.”
Some analysts have pointed to Pakistan’s growing debt, shrinking reserves and deteriorating external position as proof that Islamabad will need to turn to the IMF or China, which is financing about $60 billion of infrastructure investments across the country, for financial support.
“We have a very strong growth story,” Bajwa said.
- World Bank chief says COVID-19 likely to hit poorest countries hardest
- UPDATE 3-Turkish central bank moves early with 100-basis-point rate cut
- Central banks flash the cash as market panic drives liquidity squeeze
- Japan central bank loses billions on ETFs, may face annual loss
- Recession looms in Israel as central bank acts to combat coronavirus impact
- Hong Kong central bank cuts rates, bank capital buffer requirements
- Australia central bank buys $2.9 billion of bonds in first round of unlimited QE
- Bank of England teams up with central banks in Canada, Japan, Europe, the US and Switzerland in extraordinary co-ordinated global response to coronavirus crisis
- NZ central bank starts quantitative easing to tackle coronavirus
- Analyst View: Fed opens central bank swap lines to stave off coronavirus slump
- Australia central bank buys semi-government bonds as state revenues crunched by coronavirus
- UPDATE 1-Georgia's central bank keeps refinancing rate at 9%
- Covid-19: India’s Central Bank Refrains From Rate Cut, Says Country Not Immune to Pandemic
- A good moo from the Central Bank
- Norway crown rallies as central bank says it may intervene
- Russia central bank plan for analyst code stirs finance sector questions
- New Zealand central bank slashes rates at emergency meeting as coronavirus worsens
- UPDATE 1-Bond markets buckle, investors shrug off central banks steps
- Bond markets buckle, investors shrug off central banks steps
- UPDATE 3-Powerful central bank action stems bond drubbing but volatility prevails
Pakistan Central Bank Chief Says He Doesn't See Need to Devalue have 486 words, post on www.bloomberg.com at April 22, 2018. This is cached page on Europe Breaking News. If you want remove this page, please contact us.