LAHORE - State Bank of Pakistan Governor Yaseen Anwar has expressed the hope that the rupee will stabilise in the near-term as much-needed foreign inflows have started to pour in.

Talking to media here, Anwar said that rupee’s devaluation has nothing to do with the IMF agreement, under which Islamabad will be given over $6 billion under an extended lending facility for the next three years. “This is market driven and rupee devaluation is because of market forces,” Anwar said.

Pakistan’s rupee lost over 5 percent of its value against the US dollar in the last three months. The rupee hit a record low of Rs107 to a dollar on Thursday in the kerb market. He said that commercial banks have offered loan of $650 million to the government with a view to ease pressure on foreign reserves.

After the opening of SME Conference, he said that government has received $133 million from the Islamic Development Bank while the second tranche of the IMF loan will be received shortly. He dispelled the impression that recent devaluation of the rupee is due to government’s agreement with the International Monetary Fund. He observed that there is neither any explicit nor implicit understanding with the IMF on the devaluation of rupee and the issue of adjustment of rupee dollar parity was not even discussed with the lender. He said that first tranche of $544 million from the IMF has already been received while another over $130 million have been received from the Islamic Development Bank. Anwar said that the country’s economy is improving gradually; adding international rating agencies have given favourable ratings for the country.

Earlier, the SBP chief inaugurated the annual moot on SME and delivered the keynote address. He emphasized the importance of the SME sector to the development of the nation’s economy and reiterated the central bank’s support in building confidence among stakeholders.

SMEs do not have access to financing from the formal sector and have been primarily relying on the credit facilities from informal sector. The central bank is also formulating Prudential Regulations for the SMEs, including setting up of Credit Information Bureau, enabling commercial banks to finance SMEs. The Governor said the State Bank of Pakistan will facilitate the SMEs in the best way possible.

Experts in the SME sector have stressed the need to fast-track implementation of the SME Policy which envisages establishment of institutions of finance, trade promotion, facilitation and guarantees. The demand for an SME Chamber of Commerce, an export house, technical institute, ombudsman, venture capital fund, credit guarantee insurance are some of focal points that require the attention of the government to uplift the SME sector.

The opening session was chaired by Farooq Iftikhar, President Lahore Chamber of Commerce & Industry and interventions by Javed Iqbal, Head-SMEs, Bank Al-Falah; Sultan Tiwana, GG, SMEDA and Javed Iqbal, Project Manager, IFC-World Bank Group.

The speakers dilated upon the need for the central bank to facilitate the SMEs in their quest for financial needs, thus strengthening institutional ties to gain access to finance.