Discontinuation of decimal coins such as 25 or 50 paisas did not have any effect on the inflation or economy and in fact it was the other way round as the high rate of inflation reduced the purchasing power of the lower denomination coins.
This was stated by the State Bank of Pakistan (SBP) on Monday in its comments submitted to the Sindh High Court (SHC) on a petition against decisions of the former federal governments with regard to the discontinuation of the coins of 1,2,5,10,25 and 50 paisas.
A senior joint director of the SBP informed the SHC that Pakistan was not the first country which did away with its smallest unit of currency as in the past few decades, Britain, Canada, France and Spain and others countries had done the same. The SBP official submitted that despite its discontinuation, technically the paisa was legally acknowledged as the online and card payments continued to be billed to the exact paisa.
The official informed the high court that the discontinuation of decimal coins did not have any effect on the inflation or economy but it was the high rate of inflation that eventually reduced the purchasing power of lower denomination coins. He said that people instinctively recognised such fact which is why lower denomination coins got piled up in drawers and money boxes and keeping them became more of trouble for the people in comparison to their worth.
Rejecting the petitioner’s allegation that such coins were discontinued on instructions of the International Monetary Fund (IMF), the SBP representative submitted that adoption of articles of IMF’s agreements had nothing to do with the discontinuation of decimal coins.
He submitted that the financial support given by the IMF was meant to bridge the country’s current account deficit as the main purpose of the IMF was to facilitate the expansion and balanced growth of international trade.
The court was requested to dismiss the petition as the federal governments had been empowered to take decisions about minting and discontinuing coins by the Section 15-A of the Pakistan Coinage Act.
Recruitment in KPT
The SHC issued notices to the Karachi Port Trust (KPT), the federal government and others on a petition against an advertisement for recruitment in the KPT. The petitioner, Salman Mujahid, submitted that the impugned advertisement with regard to recruitment in KPT was against the 2014 recruitment policy of the federal government.
He submitted that citizens of Karachi and Hyderabad had been ignored in such recruitment process and requested the high court to suspend the impugned advertisement till it announced a decision on the petition.