Rupee now closer to equilibrium, says SBP chief

ISLAMABAD – Governor State Bank of Pakistan Tariq Bajwa on Tuesday said that rupee had depreciated by five percent against US dollar, which is now closer to the equilibrium.

“I cannot say about further rupee depreciation,” said Governor in informal talk with the media after giving in-camera briefing on the current devaluation of Pakistan’s rupee against dollar to the National Assembly’s standing committee on finance and revenue. Pakistani rupee depreciated by 4.8 percent last week. Dollar value has gone beyond Rs110.5 per rupee, closer to the equilibrium, he said.

Bajwa ruled out the possibility of launching another international bond in next few weeks to manage external vulnerabilities. “We have successfully generated $2.5 billion by issuing Euro and Sukuk bonds in international,” he added. The amount has jacked the central bank’s reserves to $14 billion, which are enough to cover three months import bill. The central bank could repay around $6 billion borrowed from commercial banks under the forward and currency swap arrangements any time.

Governor State Bank of Pakistan admitted that current account deficit would widen during the ongoing financial year. However, he was optimistic to handle the situation. The country would need financing of around $11-12 billion, which would be managed, he remarked. “There is no need to worry regarding repayment, as all the repayments will be made on time”.

Earlier, Secretary Finance Shahid Mahmood informed the committee that government of Pakistan would have to repay $5.8 billion loans during ongoing financial year. The government had repaid $2.4 billion as loans during five months (Jul-November) of the ongoing financial year, which also included interest rate. The committee decided that an exclusive meeting should be convened on the foreign loaning and aids etc.

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