Dar says foreign exchange held with commercial banks property of citizens

Federal Minister for Finance and Revenue Ishaq Dar on Wednesday “categorically” dismissed rumours suggesting that the government is considering “access to foreign exchange held with commercial banks.”

“It is categorically denied and clarified that there is no such move under consideration of the government,” said Dar in a series of tweets.

The federal minister said that the national foreign exchange reserves always include foreign exchange held with State Bank of Pakistan (SBP) and commercial banks.

“Recently I quoted the forex reserves figure based on this principle,” he said.

The statement comes days after the finance minister had said Pakistan’s foreign exchange reserves stand at $10 billion and not $4 billion, as $6 billion held by commercial banks also belong to the country. The remarks sent shivers down the spine of depositors who felt there could be a repeat of 1998 when the government, also run by PML-N at the time, seized foreign currency funds held by commercial banks.

However, Dar categorically denied the assertion.

In his recent tweets, he said “some vested elements who ruined this country’s economy in the past, gave it a deliberate twist and started a campaign as if the government was considering access to foreign exchange held with commercial banks which indeed is the property of the citizens.”

“Therefore, said misconstrued, misinterpreted and malafide, propaganda should be ignored,” he said, adding that Pakistan’s forex reserves position is expected to improve in the near future.

Pakistan is facing an economic crisis with a widening current account deficit and low foreign currency reserves. This has led to the country seeking assistance from the International Monetary Fund (IMF), and other multilateral and bilateral lenders.

The foreign exchange reserves held by the central bank reached a nine-year low level of $5.577 billion as on Dec 30, 2022 compared to $5.822 billion as of Dec 23, 2022. The decline in the reserves is due to external debt repayments, the SBP said.

Pakistan secured pledges of nearly $10 billion for flood rehabilitation and reconstruction at the ‘International Conference on Climate Resilient Pakistan’ in Geneva on Monday.

However, it has yet to resume its stalled IMF programme, which many believe remains the key to unlocking other funds, avoid default, and ensure some sort of economic stability.