I agree. The SBP can not be a challenger nor all-in channel for fiscal policy. You rightly note the Balance of Payment crises. This begs the question of how to define financial and price stability. 1) Targeting exchange rate volatility against a basket of currencies of the largest trade partners would be a more specific mandate. 2) Developing the capital markets through a phased approach promoting uniform platforms, transparency, electronic access, international investment, for all market segments, including debt markets, would go a long way. That could be a much more specific financial stability mandate.
5 year plans are not always communist/socialist. Let the SBP be accountable to its own stated plans within its mandate. After all, private enterprises often have 3 to 5 year strategies, with executive management accountable to a Board of Directors and regulators.
I agree. The SBP can not be a challenger nor all-in channel for fiscal policy. You rightly note the Balance of Payment crises. This begs the question of how to define financial and price stability. 1) Targeting exchange rate volatility against a basket of currencies of the largest trade partners would be a more specific mandate. 2) Developing the capital markets through a phased approach promoting uniform platforms, transparency, electronic access, international investment, for all market segments, including debt markets, would go a long way. That could be a much more specific financial stability mandate.
5 year plans are not always communist/socialist. Let the SBP be accountable to its own stated plans within its mandate. After all, private enterprises often have 3 to 5 year strategies, with executive management accountable to a Board of Directors and regulators.
Best,
Haris