ISLAMABAD, Dec 31: There is no pressure on exchange rate today due to Pakistan’s stable foreign exchange reserves which are likely to touch $10 billion mark by June 30, 2003, says a senior government official.

“The building of good foreign exchange reserves does not mean that we should start offering certain relief to the people”, said Economic Adviser to the Ministry of Finance Dr. Ashfaque Hasan Khan.

He told Dawn that reserves had been raised to meet unexpected foreign shocks like that of 9/11 or danger of war with an enemy. “Reserves are in fact a safety valve to meet any eventuality and they save us from compromising our financial sovereignty”, he said adding that stable reserves also stop any government to keep raising begging bowl for external support.

Dr. Khan said that as far as common man is concerned, he has a relief that there will be no rupee depreciation due to stable reserves. “And at the same time inflation is well under control which otherwise could cause increase in the prices of petrol and other utilities”.

He said he has often encountered this question that why the government was not providing any relief to the people if the country’s foreign exchange reserves have reached to over $9 billion.

“These reserve are not meant for any relief but to safe Pakistan from any embarrassment at any critical time”, he said.

Responding to a question, he said it was wrong to say that there was no economic activity or there was no investment in the country. He recalled that All Pakistan Textile Mills Association (Aptma) had recently said that there was Rs46 billion investment made in 2001-2002 in the textile sector.

“But this is the failure of Federal Bureau of Statistics (FBS) that it has not reflected in its books the investment of Rs46 billion made by textile sector”, he said.

Dr. Khan said that there was a need to reorganize the FBS so that the numbers of investment could be truly reflected in their books.

“Then you must know that there has been $1 billion investment made in the Balancing, Modernizing and Renovation (BMR)”, the economic adviser said. The economic activity, has started picking up in a big way.

Giving the details, he said that there has been 18 per cent increase in the import of non-oil and non-food items during the first five months of 2002-2003.

“There has been 47.5 per cent growth of sales tax which shows that economic activity is picking up”, Dr. Khan said.

The production of car is up by 35 per cent and similarly the growth in the manufacturing sector has increased to over 36 per cent. A number of items like cement and refrigerator have shown better production during the first five months of the current financial year.

“The import of machinery was up by 28 per cent and this shows that people are establishing their factories”, he said. — I.H.