No economic crisis in country, says Asad Umar

ISLAMABAD: Minister for Finance Asad Umar on Tuesday said there’s no financial crisis in the country as all economic indicators were improving and moving in the right directions.

He urged the elements who were creating misconceptions and chaos with regard to the country's economy not to spread such rumours, as it would not do any service to the country.

"The country's economic situation is far better now as compared to what it was about 4 to 5 months ago as exports started to increase, imports are decreasing, remittances are increasing and with the result current account deficit was also shrinking," he said adding the current account deficit has been decreased to $1 billion per month from $2 billion a few months ago.

He was addressing the inaugural session of the 5-day 11th South Asia Economic Summit here, organized by Sustainable Development Policy Institute (SDPI).

Asad Umar said that the State Bank of Pakistan (SBP) was an autonomous institution and the government fully believed in neutrality of the bank.

"The government has no plan to change its policy with respect to independence of SBP, and if required, we will also do further institutionalization in the bank's structure," Asad Umar added.

Finance Minister said the exchange rate decision was taken by SBP and it would continue to take the decision independently.

He, however stressed the need for improving communication mechanism saying that he also asked the SBP governor for developing a proper mechanism in this regard.

He said before the fresh wave of volatility in exchange rate, the SBP governor had informed him that the KIBOR and inter-bank rate of dollar against rupee was increasing, therefore the central bank would have to take decision of devaluing its currency.

"Although I knew that it will happen but I did not know when it will happen and how much the value of rupee will be devalued.

"The minister said by the start of current year the value of rupee against a dollar was Rs105 while by time when the interim government handed over to the newly elected government in August this year, the value plunged to Rs128 and now after lapse of further 4 months the value has further decreased by Rs10. He said there was not any economic crisis in the country and the financial gap of the year 2018-19 had also been closed.

With regard to regional connectivity, the minister hoped that the cooperation of South Asian Association of Regional Cooperation (SAARC) would strengthen in future despite the lucrative response from the Indian side.

"We really need to think out of the box solutions, amid tensions and political confrontations between the two states," he said adding "If we promote the intra-regional trade and took step in the right directions, we can meet the need of the people and bring people out of poverty".

On the occasion, former caretaker minister for finance Dr Shamshad Akhtar said regional connectivity among the regional countries especially with India was vital to promote development of the region.

In connection with Pakistan-India relations, she asked India to also adopt the idea of "Naya Hindustan" as was promoted by the present government's "Naya Pakistan" to promote regional peace and connectivity.

She said China's Belt and Road Initiative was important as it could play critical role in sustainable development in the region.

She said with the improved connectivity through road, railways, air, sea, and digitization, the cost of doing business would significantly reduce and ultimately it would help development of the region where a huge population with extreme poverty lived.

She said Iran had already expressed its interest to become part of China-Pakistan Economic Corridor (CPEC) and India should also become part of the Chinese grand BRI to improve trade and development in the region.