MULTAN, Jan 25: The State Bank of Pakistan has been upholding the dollar from further slide against the rupee only to support the export sector on the cost of common man’s interest.

This was stated by SBP Governor Dr Ishrat Hussain while speaking to the executive committee members of Multan Chamber of Commerce and Industry (MCCI) on Friday.

The SBP chief attributed strengthening of the rupee viz-a-viz the US dollar to a variety of reasons, including the consequences of September 11 incident and action against ‘hundi mafia’ in the US and other countries. Besides, he added, due to the fall in oil prices in the international market the spending on import of the country had also been come down as the import bill for the POL products, which earlier was $300 million per month and now it was $200 to 225 million per month.

He said at present the central bank had foreign exchange reserves of $4.8 billion and vowed that the SBP would continue excessive buying of the dollar to stabilize its parity with the rupee at the current level of Rs60.

He said the government knew that decline in dollar’s exchange rate could benefit the general public owing to the reduction in the prices of import items “but the country needed more foreign exchange reserves for the revival of the economy.”

Dr Ishrat said the government was restructuring the economy on solid grounds instead of doing mere cosmetic effects. He underlined the need of collaboration between the public and the private sector to meet the challenges of WTO regime to be implemented globally from January 1, 2005.

He said the export refinance rate would be reduced further by one per cent from current 8.5 to 7.5 from February 1. He informed the business community that 1.5 per cent is negotiable and that the entrepreneurs should bargain with the banks.

He said the State Bank could not fix the mark-up rate of commercial banks, however, he added, the SBP had taken certain measures to bring the mark-up rate down, which included encouragement of small banks to open more branches to create an atmosphere of competition.

He urged the business community that they should contact small banks if big banks did not suit them.

On the revival of sick industrial units, he said now the owners of such units could also directly approach the committee constituted for the revival of sick units.

To a question, he said the SBP was leading the banking sector towards market determine mark-up rate through healthy competition. For this, the giant official banks like United Bank Limited and Habib Bank Limited were to be privatized soon.

He agreed to a suggestion that the central bank should issue a weekly statement regarding the LCs of raw cotton import so that the cotton market stakeholders could have a clear picture of the stocks.

Earlier, MCCI president Mian Anees Sheikh demanded revival of sick industrial units, facilities for the export of non-traditional goods especially form Multan, simplification of the process of export refinance, fixation of inter-bank dollar rate for at least three months to discourage speculations, reduction in mark-up rate and representation in the Central Credit Advisory Committee.