Business

Should Pakistan discontinue the Rs5,000 currency note?

Published

2 years ago

Farwa

KARACHI: Former chairman of the Federal Board of Revenue (FBR) Shabbar Zaidi on Thursday insisted that the discontinuation of Rs5,000 note and curbs on the physical movement of dollars is key to curbing the cash economy in the country.

The financial expert made these remarks on Geo News show Aaj Shahzeb Khanzada Kay Sath just hours after a fake notification fuelled rumours among the people claiming that the government has decided to ban the note of the highest denomination.

Zaidi maintained that currency circulation is very high in Pakistan and the Rs5,000 note provides convenience in the cash economy, adding that people have kept wealth in their lockers in dollars and Rs5,000, which should be banned.

“What will a person do with cash dollars in Pakistan, if anyone is seen with the greenback, should be arrested until he proves where the dollars came from.”

This is fake. The Govt of Pakistan shall act against the people spreading this kind of fake news to create chaos.
یہ جھوٹا نوٹیفکیشن ہے۔
حکومتِ پاکستان ایسے جھوٹے نوٹیفیکیشن پھیلانے والوں کیخلاف سخت کارروائی کرے گی۔
👇 pic.twitter.com/9yU3DlM5UK
— Murtaza Solangi (@murtazasolangi) September 7, 2023

50% of the people will not encash if they are asked to deposit the note in banks, Zaidi added, and cited the example of India which discontinued the Rs2,000 note some time ago in a bid to curb corruption.

He, however, suggested the authorities give some time to the holders so that they can exchange it.

“I spoke about shutting down exchange companies, now people have understood the reason behind it. The work of the exchange companies should be given to the banks, these companies will be abolished in a year. There are no exchange companies anywhere in the world except Dubai. By establishing exchange companies, the dollar has technically been made the currency of Pakistan.”

‘Discontinuation of Rs5,000 will create uncertainty’

On the other hand, former finance minister Miftah Ismail has strongly opposed the idea, saying the move will only create uncertainty and fear and will not solve the problem we are trying to address.

MIftah Ismail shared that the Indian economy suffered a setback of 1-2% due to this.

The former minister mentioned that people do find ways to avoid restrictions and every note of Rs2,000 was encashed in India.

“It is not proved anywhere in the world that discontinuation of currency stops corruption.”

Opposing Zaidi’s idea, Ismail said it would increase dollarisation.

He credited the appreciation in rupee value to an increase in confidence after the recent meeting of military leadership with the businessmen.

“Smuggling of petroleum products from Iran is necessary,” Ismail added.

Business

E&P Companies Will Invest $5 Billion in Pakistan’s Petroleum Industry

Published

2 days ago

Farwa

Over the next three years, local and foreign companies involved in Pakistan’s oil and gas exploration and production sector have shown a strong desire to invest more than $5 billion in the nation’s energy sector.

Recent changes to the Petroleum Policy and the implementation of an exclusive tight gas policy, which provide better incentives and a more investor-friendly regulatory framework, are credited with the increase in investor confidence.

These strategic changes are expected to boost domestic energy production, open up new avenues for growth, and draw large amounts of both domestic and foreign investment.

Business

With inflation slowing, the SBP is anticipated to lower the policy rate for the eighth time in a row.

Published

2 days ago

Farwa

Businesspeople anticipate another reduction in the policy rate when the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) releases the updated rate.

The interest rate for the upcoming two months will be announced by the central bank. It is still unclear if the rate will stay the same or be lowered to reflect stakeholder expectations.

According to experts, the policy rate will be lowered in order to further boost the nation’s economic sector.

Interest rates may be lowered for the seventh time in a row if the inflation rate declines significantly more than anticipated.

In its last six sessions, the MPC had cut the policy rate by 10 percent. In January 2025, it decreased the rate by one percent to 12pc.

12PC POLICY RATE

In January, the State Bank of Pakistan (SBP) announced cut in key policy rate by 100 basis points (bps) to 12 percent from 13pc in line with expectations of the business community.

The policy rate, which had been at 22 percent since June 2024, was slashed by 1,000 basis points to 12 percent.

The SBP governor said the decision was taken with careful consideration. “Although inflation is expected to decline next month (February), core inflation remains a pressing concern,” he stated.

Ahmed highlighted strong remittance inflows and robust export growth as key factors supporting the current account.