960414

NA question hour

Forex has increased by $170m

in last six months: Shahab

RECORDER REPORT

ISLAMABAD: Minister of State for Finance Makhdum Shahabuddin, during the question hour here on Sunday, told the National Assembly that there has been no fall in foreign exchange reserves during September 30, 1995 and March 31, 1996. "Instead, there has been an increase of $170 million, as reserves have gone up from $1527 million as on 30.9.1995 to $1697 million as on 31.3.96. On 3.4.1996, the reserves stood at $1693 million", he said.

"The reserves went down to $461 million and, at present, they are $1.7 billion. During the last two and a half years, they have never gone below one billion dollars". He said that there were reasons for the building up of the reserves. "There are the foreign capital inflow, IMF funding and boost in exports," he said.

Ejazul Haq said: "The minister has himself admitted a trade deficit of Rs 80 billion and wanted to know the breakup of the reserve amount of $1697 million. How much of it is the deposits of the citizens, the short-term loans etc, and what is actual amount of reserves". The minister required a fresh notice for the answer.

Kh. Asif asked whether it was a fact that the government had taken a loan of $600 million from Al-Baraka to service the debt commitments as it was short of the amount. The minister denied that any loan was taken from Al-Baraka. "It is the mis-information factory of the member which has come out with this amount," the minister said. Kh. Asif again asked whether it was true that the government raised $200 million from the consortium of five banks and whether the government had repaid the loan for which the two months period has already expired.

Rao Qaisar Ali Khan asked whether it was true that the Punjab government had been barred from acting independently in financial matters, while recovery of loans from the Punjab is 80 percent and from Sindh only 10 percent. The minister denied the assertions of the member.

Responding to a question by Syed Zulfiqar Ali Shah, Shahabuddin said that $276 million, provided by the IMF was included in the foreign exchange reserves.

Responding yet to another question, he said that the Prime Minister was the finance minister and that he (Shahab) was the sole spokesman of the Finance Ministry in the House. He said that she understands financial matters more than any one in the House. "She provides the guiding role, and we are grateful to her," Shahab asserted.

In reply to a question about the stock exchange, the state minister said that fluctuations were normal in the stock market. He said the stock market in the previous regime had gone down to 1243 points, and "now it is 1563 points. This is not an alarming situation". He denied that tough budget would have any adverse effect on the stock market. "The stock market situation does not represent the economic situation of the country. The exports are increasing, the foreign exchange reserves are on the increase, while imports have dropped. Financial institutions like EBOI always wanted to invest in the stock market and the government has complied with this wish," Shahab told the House.

Responding to a call attention notice, Food Minister Yusuf Talpur said that there was no shortage of Atta in the frontier province. Some 1.5 million tons of wheat were available for lifting by the frontier province. "The problem of smuggling to Afghanistan is there, and it has to be tackled by the interior ministry," he said.