ISLAMABAD - While expressing serious concerns over the continuous currency depreciation, the parliamentary committee on Tuesday summoned the State Bank of Pakistan (SBP) governor in next meeting to explain the reasons behind rupee depreciation and central bank measures to curb it.
Meeting of the National Assembly Standing Committee on Finance and Revenue was held yesterday in Parliament House, Islamabad, under the chairmanship of Faiz Ullah, MNA. While considering the agenda about Pakistani’s rupee devaluation, monetary policy and its inflationary impact, the Committee members were of the view that Governor State Bank of Pakistan (SBP) should brief the Committee in-person. However, the Committee asked the Deputy Governor, SBP to apprise the Committee in this regard. The Committee members have expressed their grave concerns over the devaluation of Pak Rupees to USD $ and conveyed their apprehensions with regard to the increase in inflation.
The members were of the opinion that devaluation of Pak Rupee will not provide any space to control the inflation in the country. The Committee noted the effects of trade deficit and current deficit on the economy. The committee members noted that rupee is continuously depreciating since the incumbent government took charge in August 2018. Ahsan Iqbal said that rupee has devalued by 40 percent since the PTI government took charge. He expressed concerns over the absence of Governor SBP Reza Baqir from the committee’s meeting.
Deputy Governor SBP informed the committee that rupee has depreciated by around 10 percent since the start of current fiscal year, July this year. However, he could not satisfy the committee meeting on the rupee depreciation. Later, the committee has decided that Governor State Bank of Pakistan may be invited in the next meeting of the Committee for further discussion in this regard.
Pakistani rupee is under pressure from last few months. A dollar value had recently surged to Rs178 in open market.
The Committee has also discussed the deduction of 5 percent maintenance allowance from the salaries of the federal government employees working in BPS-6 to BPS-15 move by Ali Nawaz Awan, MNA. The Additional Secretary Ministry of Finance informed the Committee that the Prime Minister during the recent meeting held on 29th October, 2021 on the affairs of Pak-PWD has decided that 5% deduction from salary of federal government employees may be diverted to Pak-PWD in consultation with relevant stakeholders, accordingly the two proposals were submitted i.e. (i) The employees of BS-1 to BS-5 may remain exempted from deduction of 5% normal rent and the employees in BS-6 to BS-22 of all departments including President’s Secretariat, Prime Minister’s Office, National Assembly Secretariat, Senate Secretariat and National Accountability Bureau may be charged 5% normal rent on account of allotment of Government accommodation and exemption granted to the employees of these departments may be withdrawn to avoid discrimination amongst the Federal Government Employees. (ii). The 5% deduction from salary of FG employees may be diverted to Pak-PWD in consultation with relevant stakeholders as decided by the Prime Minister.
The Committee discussed the issues noted during the visit of the Parliamentary delegation to Azerbaijan headed by the Speaker regarding prolong and cumbersome due diligence by Pakistani banks over use of Iran (Taftan Border) as transit country, above and beyond Anti-Money Laundering (AML) requirements set by the State Bank of Pakistan (SBP). Special Invitees briefed the Committee that in many instances, documents have to be changed showing other Central Asian Countries as appetite to conduct trade between Pakistan and Azerbaijan. The situation needs serious mitigation. They were of the recommendation that selected commercial banks may be asked to do away with these onerous requirements.
The Special Invitees/Members have shared their observations regarding the issues being faced to the business community of Azerbaijan and Pakistan due to banking system and lack of interest by the private banks. After thread bare discussion the Committee directed the State Bank of Pakistan to come up with viable solution of the problems being faced to both side, in consultation with all stockholders within thirty days.