Karachi March 9 2023: Senate committee recommended State Bank of Pakistan to reduce the difference between interbank and open market rate so that everyone enjoys the fair price.
The Finance and Revenue Committee that met on Wednesday under the Chairmanship of Senator Saleem Mandviwalla here at the Parliament House lamenting the sudden dollar fluctuation said that state bank is responsible to control and maintain the actual dollar rate and take solid measures to completely curb black marketing and smuggling of dollars.
Senator Mohsin Aziz pointed out that around 4 to 5 million dollars are being smuggled every year. The committee sought details of amount of dollars smuggled to Afghanistan in the recent period. It was also noted that due to high international inter banking rates, has resulted in Hundi and black money business, “ we can see the smuggling of dollar and black money business now being done through infants “ remarked Senator Mohsin Aziz.
The committee recommended to seriously address the issue of varying dollar rate of open market inter banking and black market and bring the rate inconformity so that everyone receives a fair price.
Saleem Mandviwalla also emphasised that rupee trade with Afghanistan be immediately stopped which is also contributing to external deficit. He said that the county has reached to 17 billion dollar external deficit which was controlled and monitored better when the CCNL was in exercise and recommended to revive the working of the CCNL.
The committee was also informed by the state bank officials that the remittances have also come down, so far 2 billion remittances took place and also there was a decline in exports from 7.4 pc during July. It was informed that the major decline in exports came from food especially rice by 12 pc. Vegetables and fruits exports have also been declined by 48 and 37 percentage respectively. “ The remittances, the FDI and exports have come down the only thing risen are the loans” senator Mohsin Aziz commented.
The Senate Finance and Revenue committee on Wednesday was informed by the Governor State Bank that the current account deficit is at 3.8 million dollars and will continue to reduce. It was informed that although we were targeted for 10 billion dollars but will attain 7 billion dollars overall current account deficit by the end of this year.
It was also informed imports will be also revived with the revival of the IMF program. The Governor State Bank while admitting that the continuous deficit of the economy is due to the policy induced slow down in response to monetary policy tightening and administration measures to counter inflation and address external challenges.
It was informed that the total FX reserved of the country have declined to 9.3 billion dollars as of 24 February 2023.
It was informed that the Government repaid 2.4 billion dollars in principle loans on net basis. It was also apprised that the Monetary Policy Committee (MPC) has further increased the Policy rate by 300 bps to 20 pc in its meeting on march 2nd.
