ISLAMABAD: Minister of State for Revenue Hammad Azhar said on Thursday thatdevaluation of rupee has not put an extra burden on foreign debt, as thegovernment has to pay the external debt in dollar terms.
“Not a single penny is increased in foreign debt when the currency isdevalued as we will earn in dollar terms and then will payback also indollar terms. So, no difference will be realized in this regard,” he saidwhile briefing the Senate’s Standing Committee on Finance, Revenue, andEconomic Affairs.
State Bank of Pakistan Governor Tariq Bajwa on the occasion said, “There isno doubt that if the dollar is converted to rupee, the cost will be higher,but with an increased value of dollar against rupee, our ability to earnmore dollars would also be increased.”
However, the committee members were not convinced with the statement of thestate minister, saying how was it possible that extra burden will not beobserved on external debts when we will get less dollars against a certainamount of rupees.
The meeting was presided over by its Chairman Senator Farooq H Naik, andwas attended by senators Ayesha Raza Farooq, Dilawar Khan, Muhammad Akram,Muhammad Talha Mehmood, Imamud Din Shouqeen, Mian Muhammad Ateeq Shaikh andSherry Rehman.
Hammad Azhar told the committee that the recent rupee devaluation occurreddue to high pressure on dollar in Pakistan with rapidly decreasing foreignreserves.
He said another reason of devaluation was that the rupee became undervaluedby 28 per cent due to artificial containment of the rupee from falling.“This act of the previous government negatively affected the country’seconomy, especially exports.”
He said now all the economic indicators were showing positive signs asexports started increasing and imports, which surged by 24 per cent duringfirst five months of previous year, had now decreased by 1pc in the sameperiod of the current fiscal year.
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Hammad Azhar said by the end of last fiscal year, total current accountdeficit of the country remained around $19 billion while the incumbentgovernment was planning to set a target of around $12-13 billion by the endof the current fiscal year.
He said foreign remittances which stand around $20 billion a year should bearound $30 billion because a lot of transactions were being done throughHawala and Hundi channels.
He said the government was taking strict actions against those involved inthe illegal businesses.
Committee Chairman Farooq Naik, however, expressed his concerns over thecurrent status of the country’s economy, saying Pakistan’s economy is undergreat pressure.
Senator Ateeq Sheikh said the SBP should play role in resisting illegalsupply of dollars abroad.
Briefing about the hacking of accounts of some local banks from othercountries, the SBP governor informed the committee that in October somehackers hacked the accounts of Bank Islami and withdrew around $6 millionbut he said no individual account holder was suffered due to the incident.
