KARACHI, July 26: The government is consulting triple ‘A’ rated international fund managers for the productive utilization of its foreign exchange reserves now close to 7 billion dollars.

Well placed authoritative sources say that the government has decided in principle not to place these reserves in any equity and speculative business but would invest it in fixed income fund.

At least three well known international fund managers have been consulted by the government for management of the reserves, which are now close to 7 billion dollars and, according to the Finance Minister Shaukat Aziz, will touch 8 billion dollars figure next June.

Addressing a meeting of the local businessmen organized by the Karachi Chamber of Commerce and Industry on Friday at a local hotel, the finance minister was confident that national economy would maintain tempo of sustainable growth in the current fiscal year.

“It was 2.6 per cent growth in 00-01 and 3.6 per cent in the outgoing fiscal and we now look for 4.5 per cent growth in the current fiscal year,” he said.

Shaukat Aziz said that government’s focus was on the growth and not on the revenue. “Revenue is generated by growth,” he pointed out.

He said that well directed policies have resulted in foreign exchange reserves going up to 7 billion dollars and a market driven foreign exchange rate.

He defended State Bank of Pakistan’s intervention in the currency trading which has kept the dollar rate stable around Rs60 without which it would have come down to Rs55 and could have exposed exporters to huge losses.

He said that net revenue in the last fiscal 01-02 was Rs403 billion in which the direct taxes have shown appreciable rise. Sales tax have also grown by 10 per cent indicating that economy was gradually expanding.

The minister also gave numbers to illustrate the point that the number of individual tax payers and corporate tax payers have increased in the last fiscal.

He dispelled the impression that government has levied any development surcharge on furnace oil. “After deregulation of furnace oil there is only one per cent levy and GST and no development surcharge,” he stated clearly.

APP ADDS: he attributed the lower rate of growth during the last fiscal year to the shortage of water, which, besides affecting the agricultural produce, also increased dependence on thermal power generation.

He said the higher tariff of Independent Power Plants that included debt services will automatically fall after 2004, affecting the cost of power generation. Moreover, he added, the commencement of the power generation of 1400 mw by Ghazi Brotha in 2004 will change the scenario on this front.

He maintained that government has foreign exchange to meet the seven months imports against the past position when there used to be reserves hardly enough to fund one week imports.

About the transparency of the revenues, he said, it has been decided that CBR will print the quarterly revenues, which will also be available on the web.

He said the economy is picking up as indicated by the sale of motor cycles and auto cars. He said that the export is also on rise and the manufacturing sector is showing enhanced activity.

He said the interest rate on saving schemes have shown a reduction of 2.5 per cent and generally there was a decline of around 2 per cent in interest rate.

If you are not getting the reduced rates from banks, you must ask your banker or look into your credibility, he added.