ISLAMABAD: State Bank Governor Reza Baqir said Tuesday that Pakistan will no longer need to go to the International Monetary Fund (IMF) or any other lending institution if its foreign exchange reserves keep on rising.
Baqir provided a briefing to the parliament’s Public Accounts Committee (PAC) on the country’s monetary policy.
He informed the committee that since July 2019, foreign exchange reserves have witnessed an increase of Rs9.5 billion.
He expressed the confidence that if the reserves continued to increase then Pakistan will no longer need to ask for assistance from any lending institution, including the International Monetary Fund (IMF).
“The dollar exchange rate has fallen from Rs162 to Rs155,” said the State Bank governor, adding that inflation, too, had dropped by 2%.
He said that inflation is expected to remain at 11 or 12% in FY19-20.
Meanwhile, PML-N stalwart Khwaja Asif asked Baqir “who had invested into hot money” to which the State Bank governor responded by saying: “Investment is always made confidentially. We cannot reveal any names.”
He pointed out that the measure was necessary to protect the identities of the investors.
At this, Asif retorted by saying: “My records are accessible to everyone, including the FIA (Federal Investigation Agency).”
“Who invested $3bn in the country?”
The State Bank governor said that such questions are raised in other countries as well. “We are aware what the source is or which country the funds are coming from.”
Baqir said it is difficult to ascertain who the “true beneficiary” is for investments. He said global laws have to be implemented at all times.
Unconvinced, Asif pointed out the contradiction whereby “any agency in Pakistan can obtain anyone’s bank account details”.
Speaking of the coronavirus outbreak, Baqir said that China was experiencing a decline in orders as a result of the epidemic.
“China’s cancelled orders are now being directed to Pakistan,” he said, adding that an impact on the supply of goods from China or Iran would affect Pakistan.
He said that in the backdrop of the coronavirus, the trade situation is being monitored closely by the government.