Finance and Revenue Minister Muhammad Ishaq Dar on Wednesday clarified that the government won’t take over foreign exchange held by commercial banks, saying his previous statement regarding the country’s reserves had been twisted by certain sections.
Ishaq Dar’s recent interview gave rise to fears that the government may confiscate dollars from private banks as had been done in 1998.
In the interview, Ishaq Dar said that Pakistan’s foreign exchange reserves stand at $10 billion, a much higher figure than the central bank’s $5.6bn reserves as of Dec 30, 2022, because “dollars held by commercial banks also belonged to the country”.
The remarks triggered fears that the government might confiscate dollars from private banks as had been done in 1998 when Ishaq Dar was the Finance Minister.
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While responding to the public fears during a press conference today, Ishaq Dar said that his comment was “greatly misconstrued” and “nothing of the sort will happen”.
National foreign exchange reserves always include forex 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
— Ishaq Dar (@MIshaqDar50) January 11, 2023
He further elaborated that prior to 1999, every cent that came into the country was deposited with the State Bank of Pakistan (SBP), and private banks were not allowed to keep dollars.
The minister said “some people” had worsened the country’s situation to the extent that it had slipped from being the 24th largest economy in 2016 to the 47th.
“Even now, they cannot tolerate any good development. They gave such a twist [to my statement],” he said, adding that while the federal cabinet was busy working for Pakistan under PM Shehbaz’s guidance, such people were spreading rumors that the government would take dollars from commercial banks.
Read more: No chance of default, FM Ishaq Dar assures investors
“Nothing of that sort will happen. Everything is all worked out … and in order. Nothing to worry about,” he assured, urging those “spreading the rumors” to play a positive national role.
Ishaq Dar also tweeted about the reserves later, saying national foreign exchange reserves always include forex held with SBP and commercial banks.