Pakistan Institute of Development Economics


The Autonomy for SBP: A Fresh Look at Central Bank Independence" Part-I

Date : March 23, 2021 at 11:00 AM
Moderator: Dr. Nadeem ul Haq (Vice Chancellor PIDE)
Panelists : Riaz Riazuddin, Former Deputy Governor, State Bank of Pakistan, Dr. Hafiz A Pasha, Renowned Economist and Former Federal Minister for Finance, Government of Pakistan, Dr Salman Shah, Advisor to the Chief Minister of Punjab on Economic Affairs and Planning & Development, Dr. Atiq ur Rehman, Associate Professor, Director, Kashmir Institute of Economics, University of Azad Jammu and Kashmir.

In a significant move, the federal cabinet approved amendments in the State Bank of Pakistan (SBP) Act in the name of central bank autonomy, price stability and accountability. The benefit of central bank independence is well documented in the literature. However, there is a dire need to evaluate several important questions: Why is autonomy so important? Should every institution be autonomous? Is Pakistan is prepared for the complete autonomy of the central bank? Can only SBP manage inflation given the constraints of the supply side and governance? What will be the implications for economic growth? What will be the implications for financial stability? How will the institution be accountable?