LAHORE: In an apparent message to local banks, Finance Minister Muhammad Aurangzeb has said the government will now “borrow at its terms”.

In his virtual address to an interactive session on the China-Pakistan Economic Corridor (CPEC) on Tuesday, Mr Aurangzeb said the government wanted to “send a clear message that it is not desperate to borrow”.

Even if the government needs to borrow, it will do so “at its terms”, the minister said, citing examples of the government rejecting bids for T-Bills and Pakistan Investment Bonds to borrow at a cheaper rate in the next auction.

Mr Aurangzeb said the time has arrived for banks to start lending to the private sector.

Finance minister hopeful of IMF approval for $7bn programme; seeks private sector role in CPEC Phase II

While listing the government’s economic achievement, the minister said the rupee was stabilising, and foreign exchange reserves were enough to cover more than two months of import.

Inflation has come down, and so have the interest rate and Kibor, which affects the industry. “These are important messages we are trying to convey through the market.”

He claimed that due to better policies, the sitting government has succeeded in improving the macroeconomic situation.

“Now we need to move forward, and that means we need to stay with the reform agenda — whether it’s on the taxation side, whether on the energy side, whether it’s on the state-owned enterprises and privatisation side,” he said, adding that the government will stay on course.

Hopes for IMF package

The minister also said the Inter­national Monetary Fund (IMF) will soon approve the $7 billion programme for Pakistan.

“We are very hopeful that the IMF board will approve this 37-month programme for Pakistan under which we are very committed to doing structural reforms.”

The IMF board will meet on September 25 to discuss the loan programme. The decision came following speculation that the disbursement of funds was tied to delays in debt rollover confirmation from China, Saudi Arabia, and the UAE.

The delay was also speculated to be related to the government’s failure to arrange for fresh funds to cover the external financing gap of $2bn for the present fiscal year.

In his address, the finance minister thanked China for the “support that we’ve had on the Fund programme as a long-standing partner of the country”.

Talking about CPEC’s Phase II, the minister said the first phase was all about infrastructure, and now it’s time to monetise this infrastructure.

He said the country, unfortunately, “missed the boat” in terms of following through on the second phase.

“But it is not too late,” he said while reassuring that Prime Minister Shehbaz Sharif and his cabinet are unanimous in supporting the execution of CPEC phase 2.

He sought the private sector’s involvement in various projects under CPEC phase 2 and assured the industry and local and foreign investors of full support in this regard.

Earlier, Chinese Ambassador Jiang Zaidong asked the participants to play their role in strengthening China-Pakistan relations through collective wisdom.

Other than Mr Zaidong, the Chinese consul general in Lahore, Zhao Shiren; economic experts; private investors; businesspersons; and policymakers attended the event.During the event, various stakeholders presented various plans for cooperation on ship recycling, healthcare, packaging, mining, moringa farming, smart city solutions and IT.

Published in Dawn, September 25th, 2024