One of the goals of this substack (apart from my vanity of continuing to have a substack) is to try to unpack the decisions which earlier I used to accept unquestionably because IMF or IMF trained management of SBP had proposed them. This wasn't the goal of this substack initially. SBP Governor Reza Baqir had been instrumental in this substack taking this turn. Initially, he was solely focused on keeping the discount rate at 13.25% to attract hot money. One can only write one or two posts critiquing that policy. But then he took a turn towards populism. That along with his love of PR provides me with enough new material to continue writing this substack. As a result, this substack has pivoted to “SBP-watch” with occasional diversions into other topics. Reza has been a gift that keeps on giving. From the feedback, I know people at SBP read this substack. If anyone at SBP reading this has access to Reza, please convey my gratitude to him. (Also I am running out of new current photos of him so more PR please).
When I started this substack at the beginning of this year, I expected to run out of ideas after 4-5 posts with half of the posts dedicated to real estate. Every post that I write, I believe is the last or second last post. Then some announcement comes from Reza which plants a seed that germinates into another post, or a tweet by SBP sparks an interest that sends me down a rabbit hole of research, or someone reaches out to me on email/WhatsApp/comments and points out an error or a shortcoming in my post compelling me to write another post to admit and rectify my mistake (a post is in the works with respect to this point).
Mostly I write for selfish reasons. There may be gaps in my understanding of financial matters or my way of thinking may be erroneous, so I publish in the hope that it may invite pushback in the comments or on Twitter or email. This has been an illuminating journey as my understanding of finance has improved considerably (I like to think) dispelling the mystique surrounding central banking. I have been able to confidently question the wisdom of SBP’s decisions when it came to inflation targeting, drafting of the SBP amendment act, and statistical manipulation. Some of the posts that I like
Revolution at State Bank of Pakistan (The fall and rise of voodoo monetary economics)
What they didn't teach me at the business school about SBP's Magic Money Tree - SBP creates money out of thin air, at zero cost, with limited constraints while earning risk-free interest income on that money.
Roshan Digital Accounts: The dollars never left the US - Understanding the foreign exchange reserve balances of SBP and commercial banks
The memes that were created by me for the posts
SBP @StateBank_Pak3/3 SBP provided a targeted economic stimulus of Rs2 trillion to support the recovery through interest rate cut, principal deferment & loan restructuring, Rozgar payroll finance scheme to prevent layoffs, and concessional finance for investment in industry and health facilities. https://t.co/bOFYHJQgkN
My thanks to those who continue to read my ramblings and also to those who provide feedback. You can reach out to me on Twitter at @2paisay or by email at 2paisay at gmail dot com.