Saturday, May 25, 2024
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HomeBusinessCurrency dealers offer $24 billion interest-free loan to govt

Currency dealers offer $24 billion interest-free loan to govt

KARACHI: The Exchange Companies Association of Pakistan (ECAP) on Thursday offered the government a loan of $24 billion over the next two years to avoid taking further loan from the International Monetary Fund (IMF), which has severely dented the Pakistan’s economy.

The offer was presented by ECAP President Malik Bostan to the Senate Standing Committee on Finance in Islamabad, where he highlighted that exchange companies would be able to obtain the loan by borrowing from overseas Pakistanis, foreign firms, and global exchange companies.

The loans would be interest-free and renewable if needed, he added.

Bostan revealed that exchange companies already provide $300-400 million per month to the interbank market, which amounts to $4 billion annually. The proposal suggests that exchange companies could provide $1 billion per month over the next two years, in addition to the regular inflows.

Bostan also urged the government to review regulations for IT freelancers, who have deposits of billions of dollars in foreign banks, and to ease these regulations to encourage them to bring their deposits to Pakistan.

The Pakistani rupee continued to decline for the second consecutive day, reaching a one-week low of Rs283.92 against the US dollar in the interbank market on Wednesday.

Finance Minister Ishaq Dar had previously approved a plan for the Saylani Welfare Trust to raise $2 billion from overseas Pakistanis in February 2023.

In a bid to bring dollars to the country, the government had launched a special quota for overseas Pakistanis to perform Hajj after paying dollars to the Pakistani exchequer which would help the country to generate $194 million dollars.

Minister for Religious Affairs and Interfaith Harmony Mufti Abdul Shakoor had said that the scheme was introduced to meet the shortage of foreign exchange.

The International Monetary Fund (IMF) also delayed the revival of the loan programme to the cash-strapped country, citing various reasons including the fuel subsidy.

The fund raised concerns over subsidy for petrol scheme announced by Prime Minister Shehbaz Sharif, saying that it was not consulted in this regard.

“The IMF has sought more details from Pakistan about the scheme,” said IMF resident representative Esther Pérez Ruiz in the recent statement.

Prime Minister Shehbaz had announced a petroleum relief package of 100 rupees per litre for poor people amid sky-rocketing inflation.

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