Business

Should Pakistan discontinue the Rs5,000 currency note?

Published

1 year 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

February 7, 2025: The value of the Pakistani Rupee (PKR) in relation to the US dollar is unchanged.

Published

2 days ago

Farwa

KARACHI: The open market exchange rate between the US dollar and the Pakistani rupee (PKR) was Rs279.4 on February 07, 2025, with a selling rate of Rs281.1. The interbank exchange rate between the US dollar and the Pakistani rupee is Rs 278.45, according to Interbank.

There was no movement in the US dollar (USD) from the previous closure of Rs278.

Business

The NORINCO Group is invited by CM Sindh to explore opportunities.

Published

3 days ago

Farwa

Chinese companies have been invited by Sindh Chief Minister Syed Murad Ali Shah to visit Karachi and other regions of Sindh Province in order to observe the quickly growing businesses and investigate prospects in fields like clean energy, infrastructure development, and public transit projects.

Speaking in Beijing to a delegation headed by the chairman of NORINCO International Co., Ltd., he stated that all facilities required would be provided by the governments of Sindh Province and Pakistan.

With assistance from NORINCO International, the Sindh Chief Minister stated that the Provincial Government will firmly urge North Vehicle and BeiBen to think about setting up a Vehicle Assembly Plant in the Dhabeji Special Economic Zone.

Business

A deal with Pakistan to fight financial crimes has been approved by the Saudi cabinet.

Published

3 days ago

Farwa

In order to strengthen collaboration in the fight against money laundering, terrorist financing, and associated crimes, the Saudi Press Agency announced this week that the Saudi cabinet, led by Crown Prince Mohammed bin Salman, had approved a memorandum of understanding (MoU) with Pakistan’s Financial Monitoring Unit (FMU).

Due to its severe money laundering and terrorism funding issues in recent years, Pakistan was added to the Financial Action Task Force’s (FATF) grey list in June 2018.

The nation was taken off the gray list in October 2022 after enacting extensive measures to fortify its financial system.

The FMU is Pakistan’s financial intelligence unit, created under the Anti-Money Laundering Act of 2010 and tasked with collaborating with foreign partners and evaluating reports of suspicious transactions.

According to the SPA, “the cabinet approved a memorandum of understanding regarding cooperation in exchanging investigations related to money laundering, terrorist financing, and related crimes between the Financial Monitoring Unit in the Islamic Republic of Pakistan and the General Department of Financial Investigation at the Presidency of State Security in the Kingdom of Saudi Arabia.”

The MoU is an indication of Saudi Arabia and Pakistan’s growing strategic partnership. A significant Pakistani diaspora resides in the Kingdom, and numerous Pakistani businesses have established a presence there.

Saudi Arabia has been a key supporter of Pakistan’s economy, bolstering its reserves with substantial deposits in the State Bank of Pakistan and offering deferred oil payment facilities.