Pakistan on Thursday announced to trade with Afghanistan in Pakistani currency as foreign reserves of Kabul have been blocked by international community including financial institutions and many countries.
Finance Minister Shaukat Tarin said that now trade with Afghanistan will be done in Pakistani currency instead of dollars, as foreign reserves of Kabul have been blocked.
Briefing the Senate Standing Committee on Finance and Revenue, Shaukat Tarin said that Afghanistan is facing shortage of dollars as the International Monetary Fund (IMF) and the World Bank have seized its reserves after the fall of the previous Afghan regime. He added that the government was monitoring the Afghan situation regularly.
The committee members expressed concerns over the rising value of dollar against rupee in the last few weeks. They said that dollar value has increased to around Rs170, which was around Rs153 when incumbent Finance Minister had taken charge. The members also expressed concerns over the increase in prices of basic food commodities in the country.
Replying to the Senators concerns, Shaukat Tarin said that State Bank of Pakistan is working on it. He further said that rupee was devalued in fiscal year 2018-19, which increased the inflation rate in the country and affected the businesses.
He further said that artificially maintaining exchange rate has negative effects. He added, “The prices of food items are our biggest concern. There are times when prices of food items go up in the entire world. And we are passing through the same phase, and will control it.”
Talking about soaring import bill, the Finance Minister said that the government is importing food commodities to bridge the local shortfall in the country, which is widening the current account deficit.
He informed that Pakistan’s trade deficit stood at $4 billion. He informed the committee that Pakistan had received $450 million from the Asian Development for procurement of COVID-19 vaccines. He vowed to take the country’s GDP growth to 4.8% during the current fiscal year
Talking about tax collection, the Finance Minister said that the government has data of 15 million people who should be paying sales tax and now notices will sent to them and if they fail to respond, authorities will take legal action.
Finance Minister assured the committee that to withdraw the notices sent to the business community by Federal Board of Revenue (FBR).
He said that prices of petroleum products had increased by 74 percent in international market. However, the government of Pakistan has not increased the oil prices at that level. He said that Pakistan would have to increase its production. He said it was the government’s endeavour to give relief to the consumers in petroleum products’ price under the head of the levy.