Minister for Finance Shaukat Tarin said on Monday that the previous government of Pakistan Muslim League-Nawaz (PMLN) kept the dollar at Rs94 artificially, which cost Pakistan $60 billion.
He expressed these views during a meeting of the National Assembly Standing Committee on Finance. In the meeting, Ahsan Iqbal interrupted and objected to Tarin’s tone, while saying that the minister could not speak in such a manner. He asked if exports increased by reducing the value of local currency by 40 percent.
The National Assembly Standing Committee on Finance cleared the State Bank of Pakistan (SBP) Amendment Bill 2021 with three major changes including making an addition for barring dual nationals to serve as governor and two years conditions for not serving for other international financial institutions.
The NA panel also brought the third amendment to the proposed controversial bill that governor and other SBP officials would appear before Parliament whenever required. The NA panel held its meeting under Chairmanship Faiz Ullah here at the Parliament House and cleared the SBP amendment bill after incorporating certain changes in it.
The PML-N Leader Ahsan Iqbal proposed that the SBP governor should have one-term of five years and it should not be extendable. It was agreed by Minister for Finance Shaukat Tarin during the meeting, however, the NA panel chairman did not include the proposal in the final version.
Shaukat Tarin agreed to amend the clause on term of office of five years as non-extendible for the SBP governor and later told media persons that the matter would be raised before the International Monetary Fund (IMF), however, Committee Chairman Faiz Ullah later on did not include the clause in the final recommendations.
Shaukat Tarin conceded that there was agreement with the IMF on SBP Bill 2021 which was also seen by the Fund’s Executive Board on the occasion of approving $500 million additional tranche in March 2021. He was of the view that the existing bill was different from the last one because they told the IMF that they could not make constitutional violations.
At one occasion, Finance Minister Shaukat Tarin and Ahsan Iqbal exchanged hot words and Ahsan Iqbal stated that they were not here to listen to harsh tone of finance minister.
SBP Governor Dr Reza Baqir told the committee that he is not dual national and before joining as SBP Governor he had tendered resignation from the IMF. He said that he is Pakistani national.
He said a wrong perception was being built that the government had sold the State Bank to the IMF. “Now the document is available to everyone, the government’s powers have not been curtailed.”
Baqir asked the committee whether it was wrong to be a former employee of the IMF. “Several SBP governors have been employees of the IMF and other financial institutions.” “I have no other nationality, I am a Pakistan.”
Shaukat Tarin said that the government will still “retain control” over the central bank even after the passage of the SBP Amendment Act. The SBP will not be completely autonomous, he added. The government will nominate the eight members for the SBP’s board of directors and approve their appointment. He said that IMF asked the government to stop borrowing from the SBP as it was misused in the past. A central bank enjoys complete autonomy around the world but the SBP was relegated to a money printing machine which also resulted in inflation. The incumbent government has not borrowed from the central bank however, the earlier loans amount touched Rs7,000 billion, he added.
