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Foreign currency accounts will not be frozen, Senate told

Foreign currency accounts will not be frozen, Senate told

ISLAMABAD: State Min­is­ter for Finance Hammad Azhar told the Senate on Wed­­nesday that foreign cur­rency accounts would not be frozen and nobody would be allowed to freeze them.

Responding to questions from members, Barrister Hammad Azhar informed the Senate that foreign remittances had increased significantly in the last quarter, particularly in October.

“Foreign remittances can be increased by 30 to 40 per cent through proper channels provided Pakistanis abroad are offered competitive rates,” said Mr Azhar.

In response to a question from Senator Muhammad Mian Ateeq Sheikh on depreciation of the rupee, the minister said that the depreciation in the exchange rate during fiscal year 2017-18 had been due to a notable deterioration in the country’s balance of payments situation. The current account deficit amounts to $12.6bn and $18.98bn during fiscal year 2016-17 and 2018-19 respectively, which resulted in pressure on rupee and its resultant devaluation.

The State Bank of Pakistan was pursuing monetary tightening to curb the aggregate demand which would result in reducing the current account deficit, Mr Azhar said.

According to the state minister, the SBP had taken administrative measures to reduce import volume, including withdrawing the facility of advanced payments against imports and had imposed 100pc cash margin requirement on import of various non-essential items.

In the past, the government had imposed custom duties on luxury items. In the amended Finance Bill 2018, the government had again proposed to increase the duties on import of luxury items to curb the imports while export industries had been incentivised to boost exports.

The depreciation of the rupee against US dollar along with the other administrative measures mentioned above would help contain domestic demand in general, and reduce the imbalances in the country’s external accounts in particular, the minister said.

In reply to another question from Mian Ateeq Sheikh, Mr Azhar said that the amount of domestic loans outstanding against the government was Rs16,415bn at the end of June 2018. He said that the domestic debt was primarily obtained for budgetary support that includes infrastructure and development needs of the country.

Published in Dawn, November 15th, 2018

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