The Senate on Wednesday reproached the tightening of monetary policy by the State Bank of Pakistan, saying that the decision taken in haste would hurt the industry and businesses struggling to survive. As Senate proceedings started 45 minutes late, both the opposition and the ruling party members said that the State Bank should have waited till the conclusion of the ongoing debate on economy in the Senate.
Ishaq Dar of PML-N said that the decision taken by SBP Governor to raise the discount rate by 200 basis points to 15 percent was not in conformity with the economic situation of the country. The responsibility lies with the government to frame monetary policy in line with the economic situation of the country, he added.
"The decision was taken at a time when the House is discussing the monetary policy, and the SBP must have waited till the conclusion of the ongoing debate", he said. Khurshid Ahmed said tat the decision, at a time when the House was discussing the prevailing economic situation, was a humiliation for the prestige of the House and part of International Monetary Fund (IMF) dictation.
He said that SBP was doing all this on the dictation of IMF, and warned that submitting to its conditions would destroy Pakistan's agriculture and economic sectors. Leader of opposition Kamil Agha, criticising the government over the increase in interest rates, said that it would increase cost of production and subsequently result in closure of the industry. The government, he said, was also mulling to increase 51 percent gas price for the industrial sector.
Ilyas Bilour also criticised the SBP for increasing 2 percent interest rates and two percent mark-up rates. He said that the decision would further increase the hardships and difficulties for the business community. Raza Rabbani said that it was wrong on the part of the State Bank to increase discount rates when the Senate was in session.
"The SBP should have waited for the debate on economy to conclude in the house" he observed. He said that he did not want to talk about the past, but alleged, in response to criticism by the senator from opposition, that Shaukat Aziz had allowed capital flight of $4 billion from Pakistan by issuing a series of Statutory Regulatory Orders (SROs)."These SROs were kept secret even from the finance ministry or the state bank just to please some already privileged persons in the country" he added.
He said that it was due to policies of the former prime minister that the country today had to go once again to the IMF for an economic bailout despite the fact that PPP had always been against this institution. "Gradually, the stories of the economic crimes of Musharraf and Shaukat Aziz are coming to the force," he added.
He said that the coalition government had always stood for the supremacy of parliament and that was why the first statement on country's foreign affairs came from the floor of the Senate. "Similarly, the discussion on law and order also emanated from this floor," he said.
He said that the issue of national security in the past was always kept aloof even from the cabinet, but PPP government called an in-camera joint session of the parliament and passed a joint resolution. He said that the concerned minister now also gives a statement on the floor of the house before the start of debate on an issue.