Aurangzeb banks on strong economic indicators for stable rupee

Finance minister meets US, IMF, and World Bank officials in Washington

ISLAMABAD:

Finance Minister Muhammad Aurangzeb held wide-ranging talks with key officials of the International Monetary Fund (IMF) and the World Bank as well as senior US administration officials in Washington and discussed with them the government’s ongoing economic reforms and other matters.

According to a finance ministry spokesperson, Aurangzeb, who is in Washington on the occasion of the IMF-World Bank spring meetings, met with US Assistant Secretary of State Donald Lu and Principal Deputy Assistant Secretary Elizabeth Horst at World Bank headquarters.

Besides, according to the spokesperson, Aurangzeb spoke at a roundtable meeting with teams of Bloomberg and the Pakistan Staff Association of World Bank and IMF and addressed the JP Morgan Seminar on Pakistan’s Economic Policy Outlook.

In his interaction with the State Department officials, Aurangzeb briefed them on Pakistan’s reform agenda with a focus on broadening the tax base, streamlining the energy sector, and fast-tracking the privatization process of state-owned enterprises (SOEs).

He also highlighted emerging opportunities for US investment in Pakistan’s information technology, energy, agriculture, and minerals sectors. He told the US side that Pakistan would work closely with the International Development Finance Corporation (IDFC) and the Exim Bank.

The meeting underscored the political will in Washington to strengthen the bilateral ties with Pakistan. Both sides resolved to upgrade their economic partnerships in alternate energy, agriculture, climate resilience, and tech industry sectors.

Earlier, Finance Minister Aurangzeb met with the Pakistan Staff Association of World Bank and IMF team and apprised it of the government’s reform agenda. Broadening of the tax base, reforms in the energy sector, privatization, digitization, and public-private partnership were also discussed during the meeting.

At the round table meeting with Bloomberg officials, the minister stressed that Pakistan’s foreign exchange reserves were strong and the exchange rate had been stable; therefore, the value of the rupee was unlikely to fall further.

He said that remittances into Pakistan and the exports from the country were increasing. “Therefore, there is no justification for the traditional 6-8% annual depreciation of the rupee,” the minister was quoted as saying at the roundtable. He hoped to achieve a 4% growth rate in the coming years.

And addressing the JP Morgan ‘Seminar on Pakistan’s Economic Policy Outlook’, the minister highlighted that the inflationary pressure had decreased and the exchange rate was stable while the trade deficit was decreasing.

“The government is committed to the reform program for sustainable economic development and growth in the country,” the minister stated, outlining the three key reform areas of taxation, energy, and privatization. “Key indicators, including remittances, are showing better performance.”

Meanwhile, the finance minister also met with United Arab Emirates (UAE) Minister of State for Financial Affairs Mohamed bin Hadi Al Hussaini and discussed with him the bilateral economic cooperation and avenues for strengthening ties.

Highlighting the long-standing relations between Pakistan and the UAE, the minister expressed gratitude to the UAE’s financial support to Pakistan in times of need. He also expressed Pakistan’s interest in re-engaging with Middle Eastern banks to revive their interest in investment opportunities in Pakistan.

“The government is committed to continuing with reforms initiated under the current IMF program in the priority areas of taxation, energy, and privatization of SOEs,” Finance Minister Aurangzeb told his UAE counterpart.

During his meeting with the Executive Vice President of the Multilateral Investment Guarantee Agency (MIGA) and World Bank Group member Hiroshi Matano, the finance minister dilated Pakistan’s investment landscape and measures to enhance investor confidence.

The finance minister appreciated MIGA’s continued support in attracting foreign direct investment into Pakistan. He reiterated Pakistan’s focus on promoting sustainable and inclusive economic growth, emphasizing the crucial role of the FDI in achieving this objective.

Matano commended Pakistan’s efforts for enhancing investors’ confidence and expressed MIGA’s readiness to continue supporting Islamabad in attracting quality foreign investments across various sectors of the economy.

He also met Deutsche Bank officials and discussed with them the establishment of a sustainable finance framework for the issuance of green sustainability bonds. The bank representatives briefed the minister on different transaction structures to assist Pakistan in accessing the international capital markets.

(WITH INPUT FROM RADIO PAKISTAN)