ISLAMABAD: The National Assembly’s Standing Committee on Finance was informed on Tuesday that the rupee had lost around 8 per cent of its value against the dollar since July, but the central bank declined to offer any measures if the local currency depreciates further.

“The rupee is at its fair value,” said Governor State Bank of Pakistan (SBP) Tariq Bajwa talking to media after the meeting.

The committee meeting chaired by Qaiser Ahmed Sheikh held an in-camera briefing over the reasons for devaluation of the rupee and the SBP requested that the briefing should not be held in presence of media.

However, Mr Bajwa talked to media after the meeting and said that rupee lost its value by around 3pc from July 2017 and has dropped by 5pc now.

Regarding the future value of rupee against the greenback, he said that the market will determine the actual value of rupee against dollar and did not rule out further depreciation of rupee but stated “In our opinion we are near to equilibrium”.

Responding to a query over the ability of central bank to meet the demand for dollars by importers and banking sector, the governor said that there are $14.5 billion foreign exchange reserves with the SBP, there will be no issue if a demand of $3-4bn was raised by the commercial banks.

He also said that said there will be around $12bn financing gap for the current fiscal year but did not specify the sources through which the gap would be bridged.

“There will be around $11-12bn financing gap in the current fiscal year,” governor SBP added.

He said that there was no immediate need of short term commercial borrowing subsequent to capital market transactions of euro and Sukuk bonds.

Mr Bajwa did not categorically rule out the possibility of going to capital market again.

Meanwhile, the committee members expressed displeasure over the perpetual absence of the government’s economic team from the committee.

“We are concerned that there is no focus on finance ministry due to absence of a full time finance minister” the committee unanimously recommended.

At the same time, it further recommended elevation of the Parliamentary Secretary on Finance, Rana Muhammad Afzal, to the level of finance minister.

The committee was informed by Shahid Mehmood, secretary finance, that Pakistan required $5.9bn in terms of external debt servicing and principal amount in the current fiscal year and $2.4bn payment has already been made during the first five months.

“We need $3.5bn in the remaining months of the current fiscal year,” he added.

The committee decided to hold a detailed briefing by the finance ministry, economic affairs division and the State Bank of Pakistan on loans and financing requirements of the country in the next meeting.

The National Assembly’s Finance Committee also approved the SBP Banking Service Corporation Amendment Bill, 2017, and loan for Agriculture Commercial and Industrial Purpose Bill, 2017.

Published in Dawn, December 20th, 2017