ISLAMABAD: The Senate Standing Committee on Finance, Revenue and Economic Affairs on Wednesday expressed concerns over the depreciation of the Pakistani rupee and inflation in the country.
A meeting of the Senate body chaired by Senator Talha Mahmood underlined that the value of the rupee had waned sharply while the exports have increased only by 3 percent in the last three years.
Deputy Governor State Bank of Pakistan (SBP) briefed the committee on the devaluation of the Pakistani rupee and inflation in the country. The official failed to satisfy the Senate body as members expressed their annoyance over the rising inflation in the country.
While acknowledging the interference in the fluctuations of the rupee, the Deputy Governor State remarked that central banks all over the world intervene in the value of the dollar.
Chairman Committee Senator Talha Mahmood expressed his intent to summon the Finance Adviser and other officials for a briefing to know the contents of the recent agreement with the International Monetary Fund (IMF).
The Chairman Committee was of the view that the rupee continued to fall sharply against the dollar but exports did not surge. He said that Pakistan had engaged with the IMF 23 times, but was still on the grey list of the Financial Action Task Force (FATF).
The Deputy Governor State Bank apprised the committee that supply and demand in the market determine the exchange rate. He observed that COVID-19 pandemic was also one of the factors amongst others due to which the rupee depreciated and inflation was high.
He noted that in some African countries and Latin America the dollar was also showing muscles and the inflation was high. Chairman Committee Senator Talha Mahmood said that dollars were being smuggled to Afghanistan due to which the rupee was depreciating.
‘Irresponsible’ statement
Senator Sherry Rehman and other Senators also took notice of the statement given by the Governor State Bank Raza Baqir regarding an increase in dollar values against the Pakistani Rupee. The central bank governor had said that the rupee devaluation benefits Overseas Pakistanis.
The committee members termed the statement “irresponsible” and called for an explanation on the statement given by Raza Baqir. Sherry Rehman noted that in terms of the dollar, international organizations are predicting that it will go up to 200 rupees.
The Chairman Committee lamented that Governor SBP is not a political office and he should not make political statements. The Standing Committee decided to seek clarification from the Governor SBP on the statement.
Senator Anwar-ul-Haq Kakar said that it was the responsibility of SBP to control the fluctuations of the rupee. He said that the rupee has depreciated sharply since the arrival of the new Governor SBP.
Senator Saadia Abbasi asserted that the committee should also be informed about the recent negotiations held with the IMF. Additional Secretary Ministry of Finance said that he could not give a detailed answer in this regard and asked for more time to get details of the negotiations. Senator Musadik Malik asked whether the SBP had not intervened in the value of the dollar in the last three years.
Senator Saleem Mandviwala, Senator Sherry Rehman, Senator Kamil Ali Agha, Senator Musadik Malik, Senator Anwaar-ul-Haq Kakar, Senator Saadia Abbasi and Senator Faisal Sabzwari attended the meeting while Senator Walid Iqbal participated as a mover. Additional Secretary Finance Division, Additional Secretary Economic Division, officials from SECP, FBR were also part of the meeting.
