No economic emergency: Ministry, SBP reject accounts freeze reports as false

KARACHI: Declaring them as ‘baseless’, the government and central bank on Monday dispelled reports that measures were being considered to place a ban on withdrawals from foreign currency accounts and safety deposit lockers.

“There is absolutely no plan to freeze foreign currency accounts or Roshan Digital Accounts or take over private lockers. We have never even contemplated these steps. Nor will we ever do it. Speculation on social media about this is wrong and coming from biased quarters,” said Finance Minister Miftah Ismail in a tweet.

“The Prime Minister will at some point announce austerity measures to save the government expenditures. But there is not going to be any declaration of financial emergency. Nor is there any financial emergency. After two increases in petrol prices, we are out of the financial crisis," Ismail said.

“The government and the State Bank of Pakistan assure all account holders maintaining foreign currency accounts, Roshan Digital Accounts (RDAs), and safety deposit lockers in banks in Pakistan that their accounts and lockers are completely safe, and that there is no proposal under consideration to put any restriction on them,” said a joint statement issued by the Ministry of Finance and the State Bank of Pakistan (SBP).

Rumours are circulating on social media that the government or SBP is considering freezing or placing restrictions on withdrawals from foreign currency accounts, RDAs and safety deposit lockers. “Such rumours are absolutely incorrect and baseless,” the SBP said.

“It is clarified that such a proposal has neither been considered presently nor in the past. Moreover, foreign currency accounts including Roshan Digital Accounts are legally protected under the Foreign Currency Accounts (Protection) Ordinance 2001, and the government and the SBP are committed to protecting all the financial assets in Pakistan including the ones mentioned above,” it added.

The government and State Bank are taking all necessary measures to ensure macroeconomic stability in the country, it noted. According to the statement, the recent difficult decisions taken by the government, including the reduction of subsidy on petroleum products, would pave the way to reach an agreement with the IMF and release of the IMF tranche and financial assistance from other multilateral agencies and friendly countries.

“We are confident that these measures will relieve the temporary stress being faced due to elevated global commodity prices and geopolitical tensions, and eliminate uncertainty in the economy.” The country’s total foreign exchange reserves decreased by $378 million to $15.771 billion in the week that ended on May 27.

The SBP’s reserves dropped to $9.723 billion from $10.088 billion, providing six weeks’ import cover. Moody’s Investors Service downgraded its outlook on Pakistan to negative from stable, due to concerns including a delay in the revival of the IMF loan programme.

The government raised fuel prices by 17 percent, the consumer price index inflation reached around multi-year highs in May, and importing banks were facing difficulties in opening fresh letters of credit after the downgrade.