Govt not taking over banks' dollars: Dar.

ISLAMABAD -- After the central bank's foreign exchange reserves dropped to multi-year lows, Finance Minister Ishaq Dar on Wednesday sought to dispel the impression that the government was going to take over foreign exchange reserves held by commercial banks, insisting that his earlier statement in this regard had been 'twisted by certain sections'.

Speaking at a press conference along with Prime Minister Shehbaz Sharif and other cabinet members in Islamabad, Mr Dar also said the government would take fiscal measures set by the International Monetary Fund (IMF) to meet its budgetary targets for the 2022-23 fiscal year.

On commercial banks' forex reserves, he said it was 'categorically denied and clarified' that there was no such move under the government's consideration.

His remarks come days after he said in an interview that Pakistan's foreign exchange reserves stand at $10 billion, a much higher figure than the central bank's $5.58bn reserves as of Dec 30, 2022, because 'dollars held by commercial banks also belonged to the country'.

IMF-set fiscal measures to be adopted to meet budgetary targets

This comment gave rise to fears that the government might confiscate dollars from private banks, as had been done in 1998 when Mr Dar was the finance minister.

However, Mr Dar said on Wednesday that his comment was 'greatly misconstrued' and 'nothing of the sort will happen'. He elaborated that before 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.

'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,' he said.

He said that whenever Pakistan's reserves were quoted anywhere in the world - a survey or a document - the total figure was quoted and then a breakdown was given. 'I gave a breakdown, too,' he added.

According to the SBP data, its reserves stood at $5.58bn on Dec 30, the lowest level since April 2014. The rapidly shrinking reserves have left no space for the government to pay back its foreign debts without borrowing more from friendly countries.

Fiscal measures

The fiscal measures that the government plans to take to meet its budgetary targets included reviewing subsidies in the farming and export sectors and shedding energy sector...

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