Finance Minister Ishaq Dar has dismissed rumours that the government was contemplating access to foreign exchange held with commercial banks, saying there was no such move under consideration.
“National foreign exchange reserves always include forex held with SBP and commercial banks,” he said, adding that he had recently quoted the forex reserves figure based on the same principle.
According to him, some elements who had ruined the country’s economy in the past gave it a ‘deliberate twist and started a campaign’.
Dar asked the nation to ignore “misconstrued, misinterpreted malafide propaganda” saying “Pakistan is moving towards improvement in its forex reserves position in the near future, InnshaAllah!”
On Jan 7, in a conversation with a private news channel, the minister claimed that the reserves held by the country were $10 billion rather than $4 billion being referred to in the media. The additional reserves that Dar was indicating towards were $6 billion held by commercial banks belonging to their customers.
While the intention behind such statement might be of restoring confidence amongst masses, the impact was drastically opposite. Experts called it an irresponsible statement specially when the country is already suffering from dollar scarcity.
The government doesn’t own dollars held with commercial banks. Therefore, a statement implying to the contrary led to a frenzy among depositors.
“If the depositors lose confidence in the government’s ability to protect their dollars, there could be a spree of withdrawals and the prevailing dollar crisis would be further aggravated,” says economist Fahd Ali.
The official reserves are lurking around $4 billion as the government repaid loans worth $1 billion to Dubai-based banks during the last week. Currently, the country is awaiting the pending $1.1 billion tranche from the IMF to get itself out of the troubled waters.
