KARACHI: Advisor to Prime Minister on Finance Shaukat Tareen said Wednesday that foreign exchange reserves will be built- up with the help of sufficient inflows being arranged in next three to four weeks. He was talking to media at Jinnah Terminal of Karachi Airport. “I am going to Washington DC tonight (intervening Wednesday-Thursday) to arrange sufficient inflows which are already lined up. I will also visit friendly countries for this purpose”, Tareen added.
He said sufficient inflows will put pressure on speculators who were holding dollars. They will learn a lesson, he noted. The Advisor maintained that some banks were cartelising to drive up rates in interbank. State Bank of Pakistan was monitoring these banks and rates will come down in the market in next one week.
He categorically said the government was strictly monitoring the situation in banking sector and will not let any bank to fail. State Bank will help such banks, he added. To a question about falling deposits of banks, the Advisor said that banks were facing the consequences of paying low returns to the depositors just to protect their profitability.
Responding to a question regarding seizing of lockers, he said it was wrong and it will not happen. Not as long as he sees it, he assured. Talking of the gap between imports and export, Tareen said that deficit was falling due to drop in oil prices, effective demand management and restriction on imports. The gap will be further reduced, he hoped.
He said the economy was strong, but inflation was very high. The inflation rate at 20 to 25 percent was not acceptable and needed to be brought down because it is a tax on the poor and rich alike.
This is another reason why rupee was losing its value against foreign currencies. He said the rupee was over- valued and the previous government had artificially kept the rupee up against dollar. It should have been gradually kept afloat. Now it has come down to its real value, he added.
However, he said that government was trying to ensure that rupee should not go down below this level. The sufficient inflow will stabilise the rupee. Replying to a question about stock market crisis, Tareen said that government will buy its shares through NIT to stabilse the market. He noted that prices of government shares were very lucrative at this level.
He, however, said the government will not interfere in the market. He said more capital market reforms will be introduced beside the on-going process and de-mutualisation. The Advisor noted that the government borrowings will be cut because these are highly inflationary. Whatever has been done is enough.
He also denied the rumors about government’s intention to freeze all bank accounts, and while accusing certain banks of being responsible for the recent devaluation of Pakistani rupee, assuring of normalcy in shortest possible time.
He said the privatization process will continue as government believes that “it has no business in running business.” He said only 25 to 26 percent of the strategic stake will be sold in the privatised entity and the rest will be off- loaded when the entity turns-around and prices are high. -APP