The State Bank of Pakistan has raised policy rate to 13 percent owing to risk related to rising external/current account, fiscal deficits and worsening inflation outlook. The government has been borrowing heavily which has resulted in these steps by the SBP. At this stage, what is required is to curtail aggregate demand pressures through restraining expenditures in the short run and an increase in the production capacity of economy. Unfortunately, the government has paid little or no heed to brining economic reforms. The government's heavy reliance on SBP borrowings has continued unabated with additional new borrowing of Rs 149.8 billion between May 25 to June 30, 2008. This is further casting a gloom over our already despondent economy. -JANDAD KHAN, Lahore Cantt., via e-mail, July 30.