ISLAMABAD: Rupee devaluation will not only boost exports but curtail flows of imports to avert the balance of payments crisis, said the State Bank of Pakistan (SBP) on Tuesday defending the fall in rupee.
Testifying before the Senate Standing Committee on Finance, the SBP representatives said the devaluation will help in boosting foreign exchange reserves and foreign remittances as well. The committee meeting was headed by its chairman Senator Farooq H. Naik.
The representatives went on to say that the impact of decision is now partially visible but ensured that the full impact of devaluation would be seen in the next year. He justified the devaluation that it helped in reducing trade deficit by 1.6 per cent and current account deficit by 2.6pc.
The committee was informed that the current account deficit fell to $600 million in the first quarter this year as against $2 billion posted over the corresponding period last year.
He also said that in order to control inflation, the SBP was revising the monetary policy, the committee was informed.
Senator Mohsin Aziz who was present at the Senate Committee criticised previous government for keeping rupee artificially at a higher rate. To which the SBP representative replied that the situation was not as worse as it is today. However, senators did not agree with SBP’s justification.
Another issue that came under discussion was of the discriminatory policies against parliamentarians, advocates, politicians and journalists while opening their bank accounts and issuing credit cards.
Senator Barister Muhamad Ali Khan Saif said the banks irritate the politicians, parliamentarians, journalists and advocates while opening an account and demand unnecessary documents just to embarrass them.
Senator Musadik Malik not only endorsed the issue but also narrated his story as to how he was unable to receive credit card from a private bank even after a lapse of five months.
On this issue, the only clarification that came from the SBP representative was that there was no reason for the rejection of application without any legal reason. He said the bank officer is bound to satisfy the customer in case of denying any services.
Chairman committee Naik also criticised this attitude of the banks and directed that SBP governor should provide valid reasons to the reservations of the parliamentarians in the next meeting.
Senator Mohsin Aziz suggested SBP to take strict action against those banks which were involved in such practices. The committee also directed SBP to remove systematic restrictions to avert discrimination against any class or profession including journalists, advocates or politicians.
Chairman FBR Dr Jehanzeb Khan informed the committee that FBR has made changes in tariffs of four products including – copper, cotton rice etc. He said the non-custom paid vehicles were registered in FATA and Balochistan.
FBR Chairman informed the committee that in order to control tobacco smuggling an electronic surveillance system will be introduced soon. The chairman of the committee, however, showed his displeasure over the delays in electronic surveillance.
Published in Dawn, October 24th, 2018
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