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SBP to remain under government’s control, Tarin tells NA panel

Tarin said the bill was aimed at documenting the country’s economy. Source: FILE.

ISLAMABAD: Finance Minister Shaukat Tarin on Monday dismissed reports about complete autonomy being granted to the State Bank of Pakistan, saying that the central bank will remain under government’s control after the passage of SBP Amendment Act.

The finance minister’s comments came during a meeting of the Senate Standing Committee on Finance Revenue and Economic Affairs, with Senator Talha Mehmood in the chair.

Tarin said the government will propose names for the SBP board of directors and appoint the board members as well. “The government will also have the authority to appoint the members of the board. State Bank will not be independent,” he added,

“IMF told us to stop borrowing money from the State Bank,” he said, adding that the government has not borrowed from the SBP for the past two and a half years anyway. “However, the earlier loans amount to Rs7,000 billion,” the minister added.

He further said that in March, Pakistan was given $500 million by the International Monetary Fund (IMF) on strict conditions that were accepted by the government. However, he said, the current legislation was very different with respect to those demands.

Briefing the committee, SBP Governor Reza Baqir also claimed that the government will retain full control of the SBP despite the amendments in the law pertaining to the central bank.

He termed the news reports regarding the “auction of the SBP to the IMF” as fake news and said the “draft of the bill is not secret anymore which says that the government will retain control” of the SBP. Baqir said the impression that the IMF is getting control of the central bank is “wrong”.

‘Slight increase in Inflation’

Speaking during the session, he said that there would be a slight increase in inflation after the passage of the “mini-budget”, as he talked about the bills which are a pre-requisite to resume the $6 billion External Fund Facility (EFF) of the International Monetary Fund (IMF).

“Why shouldn’t I impose taxes on cosmetics and drinks, agricultural products should also be taxed,” the finance minister, adding that the government expects Rs100 billion income from income taxes.

Tarin said the government has delayed the talks with IMF and has given them a later of January 28 or 31, which was originally scheduled to take place on Jan 12. “We told the IMF that the parliament is not a rubber stamp. The bills that the parliament will approve will be presented before the IMF,” he added.

The National Assembly’s Monday session will take kick off at 4pm, but the SBP bill is not under consideration as per the 48-point agenda issued by the National Assembly Secretariat.

Tarin is set to seek approval of the House for the controversial Finance (Supplementary) Bill, generally known as the “mini-budget”, with the Opposition set to meet before the session to block his move.

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