Kardar for less reliance on SBP’s borrowing

ISLAMABAD: State Bank of Pakistan (SBP) Governor Shahid Hafiz Kardar on Tuesday cautioned that reliance on central bank’s borrowing should be reduced and share of private sector in credit expansion needs to be increased to support investment requirements of the country.He said this while briefing the meeting of the Monetary and Fiscal Coordination Board, which was chaired by Federal Minister for Finance and Economic Affairs Dr Abdul Hafeez Shaikh.The SBP governor briefed the meeting on the recent developments on the monetary side. He pointed out that broad money growth was recorded at 9.3 per cent as compared to 5.5 per cent of last year.Together with rising international commodity and oil prices, the inflationary pressure is persisting.

Government borrowing has also been a factor even though borrowing from SBP that had surged to a very high level of Rs315 billion during December 2010 has been brought down significantly. He cautioned that going forward deficit should be brought down and reliance on SBP borrowing be further reduced.More importantly, share of private sector in credit expansion needs to be increased to support investment requirements of the country.It was further stressed that foreign financing in the budget is also required to be increased so that domestic resources can be freed up for private sector financing.Finance Secretary Dr Waqar Masud presented an overview of the economy and noted that revised GDP growth target was 2.4 per cent and next year growth has to be accelerated to make up for the lost growth due to floods and consequent slowdown in economic activities. – Nation