Take one for the team: Central bank chief tells middle class

LONDON/ISLAMABAD: State Bank of Pakistan (SBP) Governor Reza Baqir said that while people who use imported products and can somewhat manage to travel abroad for vacations will find it difficult to downgrade their standard of living, Pakistan nationals and their families will benefit from the ongoing depreciation of the rupee against the dollar.

The remarks were made by the central bank chief in a press conference in Manchester on Thursday, Profit reported.

“Obviously people with the power to purchase expensive imported items, the ones who can afford vacations abroad, will face some difficulty,” he said.

“Rising dollar rates benefit some people and harm others. Overseas Pakistanis benefit because their family members receive more remittances. We should not forget those who benefit,” the ex-IMF official added.

“In every economic policy, some people benefit while others do not, so it should also be taken into account how many people have benefited.”

It is pertinent to mention here that a sizable amount of Pakistan’s population is middle class.

Baqir’s statement comes as the rupee, which is currently being traded above 173 in the inter-bank market, has lost over 12 percent of its value against the greenback since its recent high achieved five months ago.

Pakistan and the International Monetary Fund held their latest talks in Washington from October 4 to 15 for the release of a $1bn tranche from a $6 billion extended loan facility approved in 2019.

The reports suggested the talks did not lead to a staff-level agreement because of differences over a macroeconomic framework and uncertainty over the nation’s economy. However, the government has denied this.

The presser attracted criticism back home, however. Pakistan Peoples Party Senator Saleem Mandviwalla took exception to the comments and said it was the first time that he had seen a central bank chief hailing the devaluation of the rupee as something positive.

“This means he isn’t the SBP governor but of some other country[‘s bank] where devaluation is considered good,” he said.

Mandviwalla said everyone said the devaluation had “wrecked” the nation.

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