KARACHI: Federal Finance Minister Ishaq Dar said on Thursday that the government was making its best efforts to stabilise the exchange rate regime, and asked banks and exchange companies to help strengthen the local currency as well as the economy.

The minister held a detailed meeting with chief executives of local and foreign banks, corporate leaders, and representatives of exchange companies in Karachi, sources said.

SBP Governor Yaseen Anwar also participated in the meeting.

Banking sources said that a number of issues were discussed, including government’s borrowing from banking system, efforts to improve economic health and loans from IMF to avoid any possibility of default on external front.

While the minister appreciated exchange companies role to reduce dollar price gap between the open market and inter-bank, he did not offer any details to stop steep fall of local currency in the inter-bank market.

He was hopeful that loans from IMF would remove any fear of default that would ultimately help local currency to get strength.

The finance minister reportedly asked foreign banks for dollar-based loans and offered a lucrative rate of LIBOR plus 5pc per annum.

Sources said the minister was willing to mobilise even local banks to extend dollar-based loans to the government.

The local banks’ holding is almost equal to holdings of the State Bank.

Talking about the IMF programme, the minister said there was now no question of default “as we have entered into commitments which will take care of our international obligations for the next three years.”

The minister said the banking sector in Pakistan was performing well and urged them to come up with innovative ideas so that financial markets could play their role in revival of economy.

The banks requested a separate meeting to streamline process of recovery of their over dues.

The minister said that international banks and financial institutions, which were earlier hesitant, were now prepared to do business with Pakistan as a result of measures taken by the government.

The minister said that the focus of the present government was to secure financial discipline which had been diluted over the previous years. It was also focusing on real economy which is agriculture and industry.

He said that despite strict discipline on expenditures the budget allocated for social safety net and public sector development programme would be protected.

He said that clearance of circular debt, addition of 1700MW to the national grid and a robust plan of constructing new power plants, including 969MW Neelam-Jehlum hydropower project, 425MW Nandipur power plant, 2117MW Karachi coastal power plant, 6600MW coal thermal power plant at Gaddani, 1200MW coal plant at Jamshoro and others have now set a direction towards resolution of the energy crisis.

The minister said that an agreement was recently reached with the Karachi Electric Supply Corporation to ensure regular supply of power to Karachi.