Ishaq Dar, Pakistan’s Minister of Finance, said on Thursday that the country’s foreign exchange reserves have increased to its highest level recorded in history at about $20.07 billion.
During a press conference, the Finance Minister said that with this new development the promise of the incumbent government on increasing the forex reserves to $20 billion has been fulfilled.
Of Pakistan’s $20.08 billion reserves, about $15.24 billion is held by the State Bank of Pakistan (SBP); while the rest — which amounts to $4.83 billion — are with their commercial banks.
Ishaq Dar on Foreign Exchange
During his statement, Finance Minister Ishaq Dar said that the increase of their foreign exchange reserves goes to show that their national economy is becoming more stable because of their extensive and comprehensive economic policies and reforms that they undertook during the last 2 years.
He said “all international donor agencies as well as rating agencies now hold Pakistan’s economy positively.”
“We are now working for sustainable and inclusive growth, consolidation of the economic gains and employment generation,” he added.
It is important to note that Pakistan has issued a new Bond which amounts to $500 million with a 10-year maturity in the International Eurobond market. The rate of the coupon was 8.25% equal to the rate of the bonds issued April last year.
The Pakistan Road Shows
As you may recall that the Pakistan team — which includes the Finance Secreatary, Waqar Masood Khan and Governor State Bank of Pakistan, Ashraf Wathra — has conducted several road shows to launch the bond in Boston, London, and Los Angeles. Meanwhile, Ishaq Dar was the one who led the final road show in New York last September 23. The pricing of the bonds was held the next day.
The Finance Ministry said that Pakistan has come to the market with a good track record of economic management since their last issue. The investors appreciated the progress that was made in the stabilization of the economy and reforms of the country which was carried out in vital sectors of energy, tax administration, privatization, and investment climate.
The International Monetary Fund Programme
According to the Finance Minister, the current government had accepted the International Monetary Fund (IMF) programme of returning back the loans made by the previous government.
In addition, he said, “When we started this programme, there was a lone of US $4.764 billion out of which US $4.498 billion have been repaid that means this government has received only US $265 million from IMF in two years.”
He also said that the country’s economic growth trajectory was the government’s main focus in order to achieve their goals of strengthening the economy.
With regards to the withholding tax on bank transactions, he said that those people who have tax numbers have been exempted from this tax. In fact, the government had already reduced it from 0.6 percent to 0.3 percent besides the one month extension on the trader’s community’s proposal.
He also informed people about the revenue collection that reached about Rs. 600 billion in the first quarter of the current fiscal year which is also one for the books.