The Finance Minister Ishaq Dar said on Thursday that he would urge the Governor of the State Bank of Pakistan (SBP) to work with a group of philanthropists in an effort to gather dollars from Pakistanis living abroad to help with the foreign cash shortfall.
Speaking via video link at a symposium on Islamic finance, Dar lauded Bashir Farooqi’s effort, the founder of the Saylani Welfare International Trust, under which prominent benefactors want to raise $2 billion over the course of five years. According to Farooqi the cash won’t result in any financial gain for the Pakistanis living abroad.
The campaign to raise money will aid in resolving the foreign exchange crunch that is delaying port officials’ clearance of imported products.
The Citizens Foundation, Akhuwat Foundation, and Indus Hospital are all involved in the program.
Farooqi stated, “We will call a joint news conference shortly to solicit assistance from Pakistanis living abroad.”
Dar also demanded the end of the interest-based system during his speech and announced the formation of a commission to oversee the establishment of an Islamic financial system.
The Finance Minister asserted that a bank that had 100 branches earlier had increased to 1,000 branches after using Islamic banking standards, according to APP.
He mentioned that the Federal Shariat Court had given the government five years to end interest-based banking in the nation and expressed confidence that it could, with the support of stakeholders, “meet the conditions established for the conversion before the allowed period.”
Dar said that he had given the State Bank of Pakistan and the National Bank of Pakistan orders to rescind their appeals of the Federal Shariat Court’s decision.
The country’s foreign exchange reserves have fallen to a nine-year low of $3.7 billion, which is insufficient to pay even three weeks’ worth of imports. This has prompted the fundraising campaign.
As Pakistan battles a severe dollar shortage, banks have been explicitly instructed by the State Bank of Pakistan to refuse to establish letters of credit (LCs) for the bulk of imports.
The administration is in discussions with the IMF for a bailout that would release $1.2 billion and open up inflows from friendly nations.