LAHORE: The pressure on rupee will ease as soon as dollars start flowing in and the Saudi oil facility of $3 billion becomes available, according to the governor of State Bank of Pakistan (SBP), Tariq Bajwa.
“The exchange rate has recently been under immense pressure because of the country’s dwindling foreign exchange reserves, which fell to just above $7bn on Dec 7 despite receipt of $1bn cash deposit from Saudi Arabia. Riyadh has since transferred $1bn more and is expected to deposit another $1bn next month as part of its assistance package for Pakistan,” he said on Sunday.
Mr Bajwa said that depreciation in the value of rupee was discussed with Finance Minister Asad Umar before the currency was last devalued. “The finance minister has himself clarified that the decision to devalue the rupee was in his knowledge as it was discussed with him beforehand,” he said.
Punjab’s finance minister says country ready to embrace ‘age of digitisation’
The government came under criticism over the sharp and abrupt devaluation of the rupee and initially Prime Minister Imran Khan came out with the explanation that he came to know about it through the media.
Mr Umar had also reportedly expressed reservations over the timing of SBP’s recent monetary policy and had told the SBP governor to take the government on board on such issues beforehand, adding that the government fully supported the concept of central bank’s independence.
Speaking to media personnel after a memorandum of understanding had been signed by the SBP, 1-Link and the Punjab government at the headquarters of Punjab Revenue Authority, Mr Bajwa said the rise and fall of dollar depended on macroeconomic fundamentals as well as market sentiment. “The rupee will get stronger when the market sentiment will be positive.”
He said the SBP had three priority sectors — low-cost housing, SMEs and agriculture — as well as two cross-cutting themes, Islamic banking and national financial inclusion.
“The Pakistan Tehreek-i-Insaf government has taken ownership of the national financial inclusion processes by according impetus to them,” he said.
Mr Bajwa said a milestone in this direction would be digitisation of all payments and receipts of the government, and added: “Digitisation creates an eco(nomic) system that helps enhance national financial inclusion.”
Lauding the PRA for following in the footstep of the Federal Board of Revenue, he said the online facility to pay general sales tax on services would facilitate the taxpayers.
Answering a question, the SBP governor said the provinces were deprived of a major revenue stream, from tax on pre-paid phone cards, after a Supreme Court decision. “We are trying to find a way out.”
Speaking on the occasion, Punjab Finance Minister Hashim Jawan Bakht said the MoU signed by the SBP, 1-Link and the provincial government would help taxpayers pay their provincial taxes through alternative delivery channels, including online banking, ATM and phone banking. “This is a huge step towards the Punjab government’s vision of creating e-PRA,” he said.
Acknowledging that Pakistan’s rating with regard to ease of doing business was quite low, he said the provincial government was committed to attracting domestic as well as international investors, leading to improvement in the country’s rating.
Mr Bakht said the Punjab chief secretary was heading an “ease of doing business committee” to make processes simpler and easier to facilitate the masses.
Referring to the other countries’ evolution from agrarian to industrial economies and Pakistan’s failure to keep pace with the developments, he said the country was now ready to embrace the new age of digitisation. “We are committed to bridging the gap by digitising the economy.”
Chief Secretary Yousaf Naseem Khokhar said that digitisation provided the way forward by ensuring ease of doing business and improving the investment climate.
The committee on ease of doing business was actively working to achieve the milestones set for Dec 31, he added.
Finance Secretary H.Y. Sheikh was also present on the occasion.
Published in Dawn, December 17th, 2018