- through of the exchange rate depreciation and adjustment in energy prices. cognizant of the building up of inflationary pressures, sbp has been pursuing a tight monetary policy stance since early 2018. however, the impact of this tightening is going to reflect in the headline inflation with a certain lag. page 2 of 10 4. at present, barring any sudden shock, the monetary policy committee ( mpc ) of sbp is of the view, as stated in the last monetary policy statement, that the adjustment related to interest rate and the exchange rate from previously accumulated imbalances has already taken place. the recent monetary policy statement has explicitly stated that the mpc decision has inbuilt the impact of following 3 important developments : first, the outlook for external financing has further strengthened with the disbursement of the first tranche associated with the imf extended fund facility, activation of the saudi oil facility, and other commitments of support from multilateral and bilateral partners ; second, the government of pakistan has passed fy20 budget that seeks to improve fiscal sustainability by focusing on revenue measures to widen the tax base. the government has also committed to cease borrowing from the sbp that would qualitatively improve the inflation outlook ; finally, on the international front, the sentiment towards emerging markets has improved as expectations of further policy rate cut in the united states have grown stronger and with all the conducive policies pakistan has the capacity to attract foreign investment. 5. as we know, the effectiveness of monetary policy critically depends on the level of financial sector development, including financial access. therefore, countries with low financial inclusion and financial development may have a weaker monetary policy transmission mechanism as opposed to countries with higher financial inclusion and developed financial markets. globally, financial inclusion is considered page 3 of 10 an effective tool for achieving sustainable and inclusive economic growth, as it is a prerequisite for equitable distribution of the economic opportunities, poverty reduction, and financial stability. pakistan is committed towards broadening access to financial services and implementing development finance reforms and policies that can empower individuals and firms to access a well - functioning financial system, which cultivates opportunities for enhanced socio - economic outcomes, improved livelihoods and protection against economic shocks. the stated vision for financial inclusion in pakistan is to improve the access and usage of quality financial services among individuals and firms, with dignity and fairness. 6. with this vision, and being cognizant of high financial exclusion in the country

access while raising awareness and understanding of financial solutions offered by various providers and providing feedback on the problems public faces. the central bank with the support of its two principal training institutions i. e. national institute of banking and finance and the institute of bankers pakistan is implementing financial literacy and capacity building for financial institution and public to leverage available financial services while building momentum for them to appreciate that pricing of formal delivery channels while high would be competitive vis - a - vis informal and other lending opportunities they may have. e. conclusion in conclusion, given the nature and intensity of financial exclusion in pakistan, we can ill afford to delay sound and quick implementation of the financial inclusion strategy that has been developed by the central bank with support of all stake holders. it is critical to recognize that this broad based strategy aims to unleash the potential of both public and private sector financial intermediaries and agencies and channel them more coherently and systematically to launch an all round aggressive campaign on financial inclusion. the central bank on its part is not in business of directing or supporting itself financial intermediation but is in the business of performing its public role and responsibility leveraging policy, legal and institutional standing and strength to act as a principal agent for motivating, mobilizing and using moral suasion with industry to serve the people. its role is more to empower the industry and its agents and to empower public through financial literacy to position themselves to access wide range of financial services in a cost effective and efficient manner. political commitment, the passion and power of mf providers and banks at large will be able to help us reach every household and individual to transform the lives of those currently excluded from financial system. the central bank has entered into a partnership with dfid to coordinate and help implement this financial inclusion package. sbp will work with dfid to establish financial inclusion fund to structure credit enhancement mechanisms and facilities for industry to develop required governance structure, infrastructure / it to facilitate mf lending and provide business entrepreneurial development support including development of capacities for accounting / financial literary, corporate governance and launching special studies / surveys to help support development of inclusive financial system groups and its impact. finally, it is important to recognize that providing poor and vulnerable groups access to financially and sustainable development finance is the most effective and respectable way of poverty alleviation.