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Finance minister rules out further rupee devaluation

Finance Minister Aurangzeb, Donald Lu mull ways to upgrade Pak-US economic ties: Aurangzeb calls for robust financial safeguards against climate vulnerabilities

By News Desk

April 18, 2024 09:34 AM


Finance Minister Aurangzeb, Donald Lu mull ways to upgrade Pak-US economic ties

Finance Minister Aurangzeb in a meeting with US officials including Assistant Secretary of State for South and Central Asian Affairs Donald Lu.

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Federal Minister for Finance and Revenue Muhammad Aurangzeb held detailed meeting with US officials including Assistant Secretary of State for South and Central Asian Affairs Donald Lu and Principal Deputy Assistant Secretary of the US Department of State Elizabeth Horst and discussed ways to bolster economic partnership between Islamabad and Washington, reported 24NewsHD TV channel.

Pakistan’s Ambassador to the US Masood Khan and other officials were also present in the meeting.

The meeting was held at the World Bank headquarters in Washington on Wednesday where the finance minister briefed the US officials on Pakistan’s reform agenda. Both sides were in agreement to further strengthen Pak-US relations. The finance minister also stressed upgrading Pakistan-US economic partnership.

Alternative energy, agriculture, climate and tech industry issues were also discussed in the meeting.

Aurangzeb also discussed investment opportunities in IT, agriculture and other sectors with the US officials, saying Pakistan will work together with US International Development Finance Corporation and with Exim Bank.

The minister also informed Donald Lu, who the PTI blamed for plotting the overthrow of the Imran Khan’s government, about the economic reforms the Pakistan government is undertaking.

The minister attended the Middle East and North Africa (MENAP) Ministers and Governors meeting with the Managing Director International Monetary Fund (IMF), according to a press release.

He thanked IMF, Multilateral Development Banks (MDBs)and its time-tested sincere bilateral partners for their support in helping the country respond to unprecedented challenges.

He further underscored aggressive reforms including broadening the tax net, privatizing loss making SOEs, expanding social safety net and facilitating the private sector. He also underlined the importance of re-channelling of SDRs, review of surcharges policy and prioritizing the RST in view of climate vulnerabilities.

No more rupee devaluation

Finance Minister Aurangzeb has ruled out any further significant rupee devaluation ahead of talks with International Monetary Fund.

Speaking at roundtable meeting with Bloomberg team in Washington, he said there is no reason for rupee devaluation as Pakistan has solid foreign-exchange reserves, stable currency, rising remittances and steady exports. 

The Minister said the government is focusing on bolstering industries, agriculture and information technology sector to push the national growth above four percent in the coming years.

MENAP meeting

In a high-profile meeting held at the sidelines of the IMF/World Bank 2024 Spring Meetings in Washington DC, Muhammad Aurangzeb emphasized the need for a robust financial safety net and capacity building to address geo-economic impacts and climate vulnerabilities.

Speaking at the Middle East, North Africa, Afghanistan and Pakistan (MENAP) Ministers and Governors meeting with the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, the minister called for a more proactive and responsive Global Financial Safety Net to tackle elevated risks, according to press statement issued by finance ministry here Thursday.

He underlined the importance of rechannelling Special Drawing Rights (SDRs), reviewing the surcharges policy, and prioritizing the Resilience and Sustainability Trust (RST) in view of Pakistan’s climate vulnerabilities.

The minister also welcomed the IMF’s renewed emphasis on capacity building through Regional Capacity Development Centers (RCDCs). He highlighted the impact of geo-economic fragmentation on Pakistan’s economy and expressed gratitude to the IMF, multilateral development banks, and bilateral partners for their support in helping the country respond to unprecedented challenges.

He underscored the government’s aggressive reform agenda, including broadening the tax net, privatizing loss-making state-owned enterprises (SOEs), expanding the social safety net, and facilitating the private sector.

Meanwhile, the minister at JP Morgan Seminar on “Pakistan: Economic Policy Outlook” presented an overview of Pakistan’s economic landscape, highlighting strong performance of agriculture sector, diminishing inflationary pressures, stable exchange rates, declining trade deficit and strong remittances.

He said that the government was cognizant of the challenges/risks ahead and was taking short and long-term measures to address them. Outlining the government’s reform agenda, he identified taxation, energy and privatization as key areas of reforms for the government.

He said that the country had achieved a semblance of economic stability after the 9-month Standby Arrangement (SBA) with IMF and was fully committed to entering into a larger and extended program with the Fund to continue on the path of economic growth and sustainable development.

According to statement, Assistant Secretary US State Department, Donald Lu and Principal Deputy Assistant Secretary, Ms. Elizabeth Horst met Finance Minister at WB headquarters to underline the political will in Washington to strengthen Pak-US ties.

The emphasis during the meeting was on upgrading economic partnerships, with special emphasis on alternate energy, agriculture, climate resilience, and tech industry. He briefed them on Pakistan’s reform agenda encompassing broadening the tax base, streamlining the energy sector and fast-tracking the privatization process of state-owned enterprises.

He identified emerging opportunities for American investments in IT, renewables, agriculture and minerals extraction and said that Pakistan will work closely with US International Development Finance Corporation and Exim Bank.

Likewise, the minister had a productive meeting with representatives from Deutsche Bank during which he appreciated the long-standing support extended by Deutsche Bank to Pakistan in various financial endeavors.

The representatives from Deutsche Bank briefed the Minister on different transaction structures that could assist the government in accessing international capital markets effectively. A key area of discussion was the establishment of a Sustainable Finance Framework for the issuance of green or sustainability bonds.

The minister also met Fund-Bank Staff Association and Vice Chairman, Public Sector, JP Morgan, Mr. Daniel M. Zelikow.

It is pertinent to mention here that Finance Minister is leading Pakistan’s delegation in the IMF / World Bank’s 2024 Spring Meetings being held in Washington DC.

Other delegates include Finance Secretary, Imdadullah Bosal; Secretary Economic Affairs Division, Dr. Kazim Niaz ; Governor State Bank of Pakistan, Jameel Ahmed and Senior Joint Secretary, Economic Affairs Division, Adil Akbar Khan.

UAE’s support commended

Aurangzeb on Wednesday appreciated United Arab Emirates (UAE’s) support to help Pakistan deal with its economic challenges.

The minister met with UAE’s Minister of State for Financial Affairs, Mohamed bin Hadi Al Hussaini, said a press release issued in Islamabad.

The minister acknowledged long-standing brotherly ties between the UAE and Pakistan. He briefed UAE’s Minister of State for Financial Affairs about the priority areas of taxation, energy and privatization of SOEs.

He also informed that Pakistan wanted to re-engage with Middle Eastern Banks.

MIGA’s support for Pakistan

Finance Minister Aurangzeb appreciated Multilateral Investment Guarantee Agency (MIGA’s) continued support to Pakistan in attracting foreign investments.

He met with Hiroshi Matano, Executive Vice President, MIGA, said a press release issued in Islamabad and discussed the ongoing economic reforms, investment climate and measures to enhance investor confidence in Pakistan.

The minister also briefed Executive Vice President of MIGA about the efforts being made to resolve the issues of Korean investment company in Pakistan.

 

Reporter Waqas Azeem


News Desk


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