More specifically, the editorial contains: (i) a contentious assertion attributed to the press conference, 'Tariq Bajwa is reported to have stated that the country has come out of the financial crisis with the help of friendly countries and the economy has been set on the right path.' and (ii) the observation, 'The Governor has appreciated the move to shift government borrowings from the scheduled banks to the SBP but such a policy would be highly inflationary and in no way will it yield a better fiscal outcome.'
While the assertion mentioned in point (i) above is not based on fact, the observation mentioned in point (ii) misses the point made by the Governor. Both of these are rebutted by SBP. Moreover, the Governor Tariq Bajwa never used the term 'financial crisis' during the entire press conference. In fact, he explained the potential ways of arresting a current account deficit while acknowledging that for FY19 the estimated financing gap has been met.
It is quite clear that whiat he only said was that the financing gap for the current financial year has been arranged by the government.
On the question of whether the Federal Government had crossed the limit set for SBP borrowing, the Governor had only clarified that that the law i.e. Section 9C of the SBP Act does not set any limit on Government borrowing from the State Bank. He further explained that under the said law GOP was required to bring its SBP borrowing to zero at the end of each quarter and if it does not then the Finance Minister has to make a statement on the floor of the house. This was a clarification given on a specific question and in no way changes the SBP stance that borrowing from SBP is more inflationary than borrowing from commercial banks.
Further, assuming these premises, the editorial goes on to claim inconsistencies between SBP's monetary policy statement and the purported statements of the Governor at the press conference. You will appreciate that publishing an editorial which relies on reported facts, particularly during the times in which important stabilization measures are working their way through the economy, weakens public confidence while unhinging expectations.
SBP enjoys congenial working relationship with Business Recorder. We expect Business Recorder to continue with its tradition of maintaining a degree of accuracy in journalism while promptly addressing inaccurate reporting.