Experts have agreed that controlling inflation is the sole responsibility of the State Bank of Pakistan (SBP) and the blame is wrongly passed on to the government.
Speaking at the Lahore Economic Journalists Association on Thursday, Sustainable Development Policy Institute (SDPI) research fellow Sajid Ameen Javed was of the view that the central bank did not use all the tools available at its disposal to frame the monetary policy.
Citing a research, he underlined that the SBP was mostly focusing on interest rate adjustments.
The interest rate when increased benefited the savers and the rich, whereas it adversely impacted purchasing power of the poor, he added.
He emphasised that the central bank should consider implications of its monetary policy for income and consumption inequality, without deviating from its basic role of managing inflation.
“The public should be taken into confidence,” he said, adding that the central bank should explain the reasons for changes in the monetary policy.
“Views of each member of the monetary policy board should be disclosed every time a policy is announced,” Javed suggested.
He added that the move would bring transparency to the system as every member would give reasons for taking a particular stance.
“This system is in vogue in India and many developed economies,” he said.
Published in The Express Tribune, November 12th, 2021.