Governor State Bank of Pakistan (SBP) Tariq Bajwa said on Tuesday that there will be around $12 billion financing gap for the current fiscal year. He said this while replying to media persons' questions after a briefing to the session of National Assembly Standing Committee on Finance over recent devaluation of rupee against the dollar and the factors behind it. The meeting of the committee presided over by Qaiser Ahmed Sheikh was converted into an in-camera briefing on the request of the Governor SBP, who said that its reporting might have adverse impact on the market.
The Governor said that about 8 percent devaluation of rupee against dollar has taken place during the last five-and-a-half months - 3 percent from July 2017 and 5 percent now. To yet another question whether rupee has achieved equilibrium against the dollar, he said that the market will determine actual value of rupee against dollar. He did no rule out further depreciation of rupee but stated that "in our opinion we are near to equilibrium."
Tariq Bajwa stated, "There will be around $11-12 billion financing gap in the current fiscal year." He did not specify how this gap will be bridged but stated that as there are $14.5 billion foreign exchange reserves with the SBP, there will be no issue if demand of $3-4 billion was raised by the commercial banks. He said that there is no immediate need of short-term commercial borrowing subsequent to capital market transactions of Euro and Sukuk bonds. The Governor SBP did not categorically rule out possibility of going to capital market again.
The secretary finance told the committee that Pakistan is required to repay $5.9 billion external debt servicing and principal amount in the current fiscal year and $2.4 billion payment has already been made during the first five months. "We are required to repay $3.5 billion in the remaining months of the current fiscal year," he added.
The committee has decided to seek a detailed briefing from the Finance Ministry, Economic Affairs Division and State Bank of Pakistan on loans and financing requirement of the country in its next meeting.
The committee also expressed displeasure over protracted absence of government economic team from the committee and emphasized the need for a full-time finance minister to look after the day-to-day affairs of neglected Finance Ministry. "We are concerned that there is no focus on Finance Ministry due to absence of a full-time finance minister," the committee unanimously recommended. At the same time it further recommended elevation of the Parliamentary Secretary on Finance Rana Muhammad Afzal to finance minister. The committee also deliberated the criteria of promotions in the NBP in detail.
The president NBP informed the committee that NBP has prepared promotion policy based on promotion assessment scoring system for different categories. The meeting was informed that promotion interviews were conducted for those employees who met the minimum eligibility criteria for promotion.
However, the committee chairman expressed his concern over the promotions made by the NBP and recommended that NBP should revisit the promotions made by the promotion Committee under the current policy while some members also suggested to refer the matter to the Law Division to seek their opinion whether the bank can revise its promotion policy in the presence of apex court's order in a similar case. The legal advisor of NBP argued that apex court's judgment has no relevance to the current promotion policy and NBP Board is fully empowered to frame its policies.
The chairman of the committee expressed dissatisfaction over allocation of 50 marks for the interview alone out of the total 100 marks and the committee recommended that NBP will furnish the breakup details (ie ACRs marks and Interview marks etc.) of individuals who were promoted according to this policy.
The President NBP informed that 50% interview marks were only for 236 senior officers who were promoted from VP to SVP and SVP to EVP. The committee discussed that State Bank of Pakistan may be recommended to review the promotion criteria implemented by NBP management for 236 senior officers of NBP.
The committee also approved 'the SBP Banking Service Corporation (Amendment) Bill, 2017' and the Loans for Agricultural, Commercial and Industrial Purposes (Amendment) Bill, 2017.
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