close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
October 14, 2018

Dollar-denominated Diaspora, Sukuk bonds

National

October 14, 2018

ISLAMABAD: After getting Prime Minister Imran Khan’s green light, Finance Minister Asad Umar Saturday said in next few weeks the government would issue dollar-denominated Diaspora and Sukuk bonds to generate finances from overseas Pakistanis.

“Although, the PTI government had announced to issue these bonds after coming into power, the initiative was halted for a short period, but now I have received the go-ahead from the prime minister,” said the finance minister.

He said although these were debt instruments, they would also be working on inviting overseas Pakistanis for equity investments.

In this process, the Board of Investment (BoI) and Special Assistant to Prime Minister for Overseas Pakistanis would have a pivotal role. They have to design and market these products,” Asad Umar said this while giving a live interview on the PTI’s social media page on Saturday night (Oct 13).

Asad said the foreign exchange earnings come through exports, remittances, foreign direct investment (FDI) or you borrow loans. Whereas outflows are on imports, profit repatriation of foreigners on their investment in Pakistan, debt servicing and repayments. This constitutes the broader measurement of economic balances i.e. Current Account Deficit (CAD).

When the IMF latest programme ended in October 2016, there was $18.9 billion forex reserves, but in last 24 months these have gone down to $8.2 billion.

In last few months, the slide in reserve accelerated fast as on average addition in CAD was recorded at $2 billion a month. The market got nervous and caused the rupee to depreciate, as dollar supply was low, so bailout package was imminent.

Regarding the public concern that why the government delayed approach to the IMF, he said, “If we had approached the IMF on the first day, they would have started blaming us for not seeking and exploring other avenues.”

Asad said he had taken oath on August 20 and exactly after two weeks he had talked to the IMF.

He said it was one of the options that we were trying to explore simultaneously and exactly the same was told to the IMF official.

“We also asked the Fund for sending a staff mission to Pakistan and it came on September 27 to October 4, 2018. The mission did an evaluation and shared with us a concept note.

Meantime, we were in discussion with China and its foreign minister visited Pakistan. The prime minister also visited Saudi Arabia and the UAE.

We got phenomenally positive response in Saudi Arabia and the UAE. In follow-up, a high-powered Saudi delegation visited Pakistan for five days. Another high-powered team of the UAE is also coming to Pakistan on October 19.

In recent IMF/World Bank meeting, I had meetings with the finance ministers of Saudi Arabia, Kuwait and the UAE. We had also taken inputs from country’s top economists on this issue.

Regarding decline in the Pakistani stock market by nine percent, he asked why India stock market got down by 10pc and so of Malaysia.

Almost all emerging markets are on the decline because of international economic scenario, as the US interest rate is going up, there is China-US trade war, oil prices are going up fast. So it is because of global scenario and no link with delay in going to the IMF.

In December 2017, Pakistani rupee had also devaluated from Rs105 and in August 2018 when the PTI came into power it was at Rs128 to a dollar. This was not because of the IMF but due to declining reserves and increasing financial gaps.

This proposed program with the IMF is the 19th program with the Fund of the country’s history. The PPP and PML have done it, and even military governments had availed themselves of these programs for seven times.

He said at the moment, Pakistan’s ‘economic jehad’ is exports. We should focus on it more. Look towards increasing exports business, garments, IT, software, business process outsourcing, SMEs, manufacturing and value added agriculture. Through, focusing it, Pakistan can come out of the crises.

Topstory minus plus

Opinion minus plus

Newspost minus plus

Editorial minus plus

National minus plus

World minus plus

Sports minus plus

Business minus plus

Karachi minus plus

Lahore minus plus

Islamabad minus plus

Peshawar minus plus