Caretaker Finance Minister Shamshad Akhtar has once again clarified that the government has no plans to take the Rs5,000 note out of circulation.
Speaking in an interview on Saturday night, the finance minister said that the remedies to Pakistan’s economic problems lay in making reforms that would encourage investment.
“Demonetisation is no solution,” Akhtar flatly told the interview.
She added that the Rs5,000 note had been introduced during her term as governor of the State Bank of Pakistan at the request of the government at the time and she still considered it to be a good step.
Akhtar said that the government in India had mulled over such demonetisation plans in the past as well and the Indian government often gave the example of Pakistan to its public.
The finance minister said that if the Rs5,000 note was broken up into smaller denominations, handling the compliations of printing and managing the smaller currency would be much more risky.
“The most important thing is that we give options to our public to actually invest in lucrative products,” she said.
She added that new schemes would have to be brought in and the stock exchange would have to be improved
Akhtar added that the government would have to ‘kill’ the black economy which was promoted due to wrong practices. She cited digitisation as a key reform to rein in the black economy.
She said that conventional banks are giving decent returns but Islamic banks are not giving ‘effective’ returns. She said that although it was the SBP’s domain, she herself had reached out to the Islamic banks to solve the issue as Pakistan had made a commitment to Islamise its banking system.
Rumours of the Rs5,000 note being taken out of circulation emerge regularly in Pakistan. In September this year, caretaker Information Minister Murtaza Solangi had to clarify that a notification claiming the note would be banned from September 30 was fake.
