Twirp: Terrorist Wahabi Islamic Rep Pakistan 4

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<b>SBP chief admits reserves built on loans</b>

ISLAMABAD : <b>While admitting that the country’s reserves have been built on loans, State Bank Governor Salim Raza said on Tuesday that the government had no other option to arrest the falling reserves amid fears of a possible default.

With this additional borrowing to build reserves, Pakistan’s citizens have been indebted with a loan of over Rs1.1 trillion, which was in violation of the Fiscal Responsibility Act passed by the previous government.</b>

These facts were revealed before the Senate Standing Committee on Finance, headed by Senator Ahmad Ali.

Asked what would be the better policy to raise reserves, the governor said it should be raised through mobilisation of domestic resources and by increasing tax-to-GDP ratio rather than going for loans.

He, however, said that these loans had been secured on concessional terms. The details of the loans would be submitted to the committee soon.

Senator Ishaq Dar urged the SBP to give details about the sourcing of the loans. He said that the government should not boast on building reserves through loans.

But Mr Tarin came to the rescue of the SBP governor saying that the government had only reserves for 45 days ($3.5 billion) for import bill at a time when the oil prices peaked to the highest level of $147 a barrel.

‘We actually had no time to wait. Apart from China, nobody came forward to help Pakistan at that time.

Responding to a question of Senator Ilays Bilour, Mr Tarin said the government would soon come up with facilitating measures to increase remittances.

‘We are hoping to increase remittances by at least $5 billion in the next couple of years through these measures,’ the finance minister disclosed.

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