Ishrat Husain, Governor, State Bank of Pakistan

Dr Ishrat Husain is The Banker’s Central Bank Governor of the Year for Asia for his leadership at the helm of the State Bank of Pakistan (SBP) that has championed and driven the reform and restructuring of Pakistan’s financial sector. The IMF observes that these reforms have resulted in a more resilient and efficient financial system that is better placed to absorb significant macroeconomic shocks.

More than that, the SBP has progressively improved its capacity to manage and maintain macroeconomic stability. Inflation is at a six-year high and could end the fiscal year in June 2005 at 7.5%, 250bp above target. Yet the SBP believes price pressures are not severe. In response, it has been measured in its monetary tightening, acting cautiously to avoid squeezing output growth, which is expected to be more than 6%.

Pakistan has transformed its largely state-owned and weak banking system into a healthier, primarily privately owned system. This has been facilitated by restructuring major banks, ongoing consolidation, strengthening regulatory capacity, and improvements in transparency, corporate governance and credit culture. As a result, the quasi-fiscal responsibilities of financial institutions have been reduced sharply. The reform efforts are reflected in improving financial soundness indicators, greater resilience to credit, market and liquidity risks, and good compliance with international supervisory standards. Pakistan’s financial sector is now more competitive and relatively efficient; the array of financial instruments available for various types of transactions in the market has widened; the financial infrastructure has strengthened; and the regulatory and supervisory functions of the SBP have improved.

Dr Husain says the financial sector reforms should be seen in the context of the overall turnaround in the macroeconomic environment. Growth is strong; inflation is low; the current account is in surplus; interest rates have fallen; exports are rising; reserves are up; and the country’s debt position has improved considerably.

“By all measures, it has been a very impressive turnaround in the economy. The reforms in the financial sector have been the most significant and more important in achieving this,” says Dr Husain.

PLEASE ENTER YOUR DETAILS TO WATCH THIS VIDEO

All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker



For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Join our community

The Banker on Twitter