Ishaq Dar, the finance minister, emphasized on Wednesday that the government will not take over foreign currency held by commercial banks, claiming that his earlier statement regarding the nation’s reserves had been misconstrued by some.
His comments come after he claimed in an interview a few days prior that Pakistan’s foreign exchange reserves, which the central bank estimates to be $5.6 billion as of December 30, 2022, are actually $10 billion, as “dollars held by commercial banks also belonged to the country.” The government could seize money from private banks, as it had done in 1998 when Dar was the finance minister, as a result of this comment, several people feared.
Dar claimed today, however, that his remark was “greatly misinterpreted” and “nothing of the such would happen.”
Dar explained at a press conference with Prime Minister Shehbaz Sharif and other federal cabinet members that before 1999, all foreign currency was placed with the State Bank of Pakistan (SBP), and private banks were not permitted to hold any foreign currency.
“In February 1999, when I was the finance minister, we devised a system whereby a substantial amount [of dollars] remain with [private] banks. It was on June 30, 1999 that reserves were broken down into three columns — those with the SBP, commercial banks, and total.
“Whenever Pakistan’s reserves are quoted anywhere in the world — a survey or a document — the [total figure] is quoted and then a breakdown is given. I gave a breakdown too,” he added.
The minister claimed that “certain people” were to blame for the country’s dire circumstances, which caused it to drop from the 24th to the 47th largest economy in 2016.
“Even now, they cannot accept any positive progress. They provided such a twist,” he said, adding that while the federal cabinet was working hard for Pakistan under the leadership of PM Shehbaz, such individuals were circulating stories about the government stealing money from banks.
Nothing like that will occur. Everything has been arranged and is in working order. Nothing to worry about, he said, urging those who were “spreading the rumors” to contribute to the good of the country.
Later, Dar tweeted about the reserves, stating that national foreign exchange reserves always include foreign currency held with SBP and commercial banks.
“Recently I quoted the forex reserves figure based on this principle. Some vested elements who ruined this country’s economy in the past gave it a deliberate twist and started a campaign as if govt were considering access to foreign exchange held with commercial banks which indeed is the property of the citizens.
“It is categorically denied and clarified that there is no such move under consideration of the govt,” he emphasized.
The finance minister said the country’s foreign exchange reserves would improve in the near future.