Finance minister denies Pakistan planning to appropriate forex reserves held by commercial banks

Pakistan finance minister Ishaq Dar gestures during a press briefing in Islamabad on January 4, 2023. (Photo courtesy: Twitter/FinMinistryPak)
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Updated 11 January 2023
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Finance minister denies Pakistan planning to appropriate forex reserves held by commercial banks

  • Ishaq Dar says foreign currency deposits in commercial banks belong to the citizens of the country
  • The FM asks people to ignore the ‘propaganda’ of those who want to weaken the national economy

ISLAMABAD: Federal Minister for Finance and Revenue Ishaq Dar “categorically denied” on Wednesday the government was planning to appropriate foreign currency reserves with commercial banks, saying the impression was created by those who were trying to weaken the national economy.

Dar said in a recent interview to a local news channel the country’s forex reserves were not just limited to what was held by the State Bank of Pakistan (SBP). He added that foreign currency with commercial banks also belonged to the country.

The finance minister maintained in a string of Twitter posts earlier in the day his statement was deliberately misconstrued.

“National foreign exchange reserves always include forex held with SBP and Commercial Banks,” he said. “Recently I quoted the forex reserves figure based on this principle. Some vested elements who ruined this country’s economy in the past, gave it a deliberate twist and started a campaign as if [the government] was considering an access to foreign exchange held with Commercial Banks which indeed is the property of the citizens. It is categorically denied and clarified that there is no such move under consideration of the [government].”

The finance minister asked people to ignore the “propaganda” which followed his statement, adding: “Pakistan is moving towards improvement in its forex reserves position in the near future.”

Pakistan is currently going through a major economic crisis amid dwindling forex reserves and rapid depreciation of national currency.

The country is likely to get some external financing in the weeks ahead, as the international community has pledged money for rehabilitation activities in the wake of the recent floods.


Pakistan extends airspace closure for Indian aircraft until July 23

Updated 23 June 2025
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Pakistan extends airspace closure for Indian aircraft until July 23

  • The restriction was first imposed in Apr. as part of tit-for-tat measures by India and Pakistan after an attack in disputed Kashmir
  • The attack, which India blamed on Pakistan without offering evidence, led to a four-day military conflict between the two countries in May

ISLAMABAD: Pakistan has extended for the second time its airspace ban on Indian aircraft until July 23, the Pakistan Airports Authority (PAA) said on Monday, citing continued tensions between the two countries.

The restriction was first imposed on Apr. 24 as part of a series of tit-for-tat measures announced by both India and Pakistan, days after an attack in Indian-administered Kashmir.

India blamed Pakistan for the assault that killed 26 tourists, Islamabad denied the allegation and called for a credible international probe into the incident. Both countries later engaged in a four-day military conflict in May.

“The ban on Indian aircraft from entering Pakistani airspace has been extended by one month,” the PAA said in a statement. “Pakistani airspace will remain closed to Indian aircraft until July 23, 2025.”

The ban applies to passenger and military aircraft operated by Indian airlines, according to the PAA. A Notice to Air Missions (NOTAM) has also been issued in this regard.

“Any aircraft registered in or leased by India would also be prohibited from using the Pakistani airspace,” the authority added.

Pakistan had previously extended the ban till June 24. It has forced Indian airlines to reroute their flights, resulting in increased fuel consumption, longer travel times and higher operational costs.

Air India, which operates numerous flights to Europe and North America, estimated in May that the airspace ban could lead to approximately $600 million in additional expenses over the course of a year and requested compensation from the Indian government.


Pakistan stocks, rupee plunge as investors react to US strikes on Iran

Updated 23 June 2025
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Pakistan stocks, rupee plunge as investors react to US strikes on Iran

  • Benchmark KSE-10 Index dropped more than 3 percent to the lowest in over six weeks
  • Analysts say if there was no further escalation, value buying is expected to come through

KARACHI: Pakistan’s stocks and currency markets tumbled on Monday as investors reacted to the United States’ (US) foray into the Israel-Iran conflict, traders and analysts said.

The benchmark KSE-100 index dropped more than 3 percent to 116,167 points, the lowest in more than six weeks, while the rupee continued to weaken against the US dollar in the seventh consecutive session on Monday.

The index has plunged by nearly 5 percent since June 13 when Israel first hit Iranian military and nuclear targets in Natanz, Isfahan and Fordow, killing top generals and scientists among 78 people.

“Rising geopolitical tensions following a US strike on Iran shook investor confidence, causing the KSE-100 Index to drop by 3.2 percent,” Mohammad Waqas Ghani, head of research at JS Global Capital Ltd., told Arab News, adding that this was the fourth largest single-day decline in terms of points historically.

The attacks on Iran by the US, which followed Israeli strikes, have intensified the war and deepened geopolitical tensions in the Middle East, sending jitters to markets across the globe.

Monday’s 3.2 percent fall was the worst since May 8 when the index had plunged 5.9 percent day-on-day, according to Ghani.

“The spike in global oil prices has further intensified concerns about Pakistan’s external account vulnerabilities,” he added.

Cash-strapped Pakistan, which is trying to revive its debt-ridden economy with the help of International Monetary Fund’s $7 billion program, spent $17 billion on oil imports last year.

Raza Jafri, head of research at Intermarket Securities Ltd., attributed the day’s fall to redemptions at mutual funds and possible margin calls.

“Regional tensions are the main reason behind the weak sentiment,” he said, adding that if there was no further escalation, the value buying was expected to come through.

RUPEE DROP

The ongoing tensions have also impacted the Pakistani currency that lost another 0.06 percent as the greenback closed at Rs283.87, according to State Bank of Pakistan (SBP) data.

The rupee is constantly falling and has devalued 0.3 percent since the start of Iran-Israel conflict.

“The rupee is feeling the heat of this war, very negligibly though,” Zafar Paracha, secretary-general of the Exchange Companies Association of Pakistan, told Arab News.

“This stability in the exchange rate reflects the overall macroeconomic stability the country has achieved.”


Pakistan’s top security body backs Iran’s right to self-defense after US, Israeli strikes

Updated 23 June 2025
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Pakistan’s top security body backs Iran’s right to self-defense after US, Israeli strikes

  • Pakistan, Russia and China have called for a ceasefire after the strikes raised fears of a wider conflict in an already volatile region
  • Experts say Pakistan, which shares border with Iran, will face additional security and economic challenges due to the worsening conflict

ISLAMABAD: Pakistan’s National Security Committee (NSC), which comprises top civilian and military leaders, has reaffirmed its support for Iran’s right to self-defense, Prime Minister Shehbaz Sharif’s office said on Monday, after United States and Israeli strikes on Iran.

The statement came a day after US attacks on three Iranian nuclear sites, joining Israel in the biggest Western military action against the Islamic Republic since its 1979 revolution.

As the strikes raised fears of a wider conflict in the already volatile region, Russia, China and Pakistan have urged the United Nations Security Council to adopt a resolution calling for an immediate and unconditional ceasefire in the Middle East.

On Monday, Pakistan PM Sharif presided over an NSC meeting to review the evolving regional situation and condemned Israeli attacks on Iran, which it said coincided with a constructive negotiation process between Iran and the United States.

“These reckless actions have escalated tensions, threatening to ignite a wider conflict and diminishing the opportunities for dialogue and diplomacy,” Sharif’s office said in a statement after the meeting.

“The NSC reaffirmed Iran’s right to self-defense as enshrined in the UN Charter.”

The NSC expressed grave concern over the potential for further escalation after the attacks on Iranian nuclear facilities in Fordow, Natanz and Isfahan by the US, reiterating that they violated the resolutions of the International Atomic Energy Agency (IAEA), relevant international law, and the UN Charter.

The forum reaffirmed Pakistan’s readiness to continue efforts to promote regional peace and stability and called on all parties to resolve the conflict through dialogue and diplomacy.

Tensions between Tehran and Tel Aviv initially flared on June 13 when Israel launched airstrikes against what it described as Iran’s military leadership and nuclear infrastructure. Both sides traded missiles on Monday in fresh strikes.

In a separate development, Pakistan PM Sharif spoke with Iranian President Masoud Pezeshkian on Monday afternoon — their second telephonic call in less than 48 hours.

“The Prime Minister conveyed Pakistan’s condemnation of the US attacks, which followed Israel’s unprovoked and unjustified aggression,” Sharif’s office said. “He reaffirmed Pakistan’s unwavering solidarity with the brotherly people and Government of Iran.”

The prime minister expressed concerns that the US strikes had targeted Iranian facilities that were under the safeguards of the International Atomic Energy Agency (IAEA), constituting a “serious violation of international law and the IAEA Statute.”

“While noting Iran’s right to self-defense, as enshrined under Article 51 of the UN Charter, the Prime Minister stressed upon the need to immediately return to dialogue and diplomacy as the only viable path forward,” the statement read. “He also called for urgent collective efforts to de-escalate the situation.”

Earlier on Monday, Pakistan’s UN Ambassador Asim Iftikhar Ahmad called on the Security Council to act “urgently and decisively,” warning against the danger posed to the populations of the region as the war intensifies.

Experts warn Pakistan, which shares a 900-kilometer porous border with Iran in its southwestern region prone to separatist militancy and cross-border attacks, will face additional security and economic challenges due to the worsening conflict between Tehran and Tel Aviv.

Surging global oil prices due to the worsening conflict will cause economic setbacks for Pakistan, which relies on expensive fuel imports for its energy demands, according to financial analysts. Islamabad is already grappling with a macroeconomic crisis amid a precarious balance of payment position.

The crisis also raises questions about how Islamabad will navigate its delicate balancing act between Iran, other Gulf partners, and the US, which remains one of Pakistan’s largest trading partners and a critical source of military and economic assistance.


Pakistan cuts 50 percent export charges at major port to boost trade, economic growth

Updated 23 June 2025
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Pakistan cuts 50 percent export charges at major port to boost trade, economic growth

  • The reduction in charges at Port Qasim is part of government reforms to enhance trade facilitation
  • Pakistan plans to establish an industrial zone to promote marine, aquaculture sectors, minister says

KARACHI: The Pakistani government has reduced port charges for exporters by 50 percent at the country’s second biggest Port Qasim, the Pakistani maritime affairs ministry said on Monday, amid efforts to boost trade and economic growth.

The development came after a strategic roadmap meeting of the ministry, at which Maritime Affairs Minister Junaid Anwar Chaudhry emphasized the government’s commitment to creating opportunities for local businesses and encouraging trade through ports and fisheries.

Pakistan is striving to boost trade and investment amid a gradually healing macroeconomic environment after a prolonged downturn that forced Islamabad to seek external financing from friendly nations and multiple loan programs with the International Monetary Fund (IMF).

“The government’s reform agenda in the maritime sector, including the charge reduction at Port Qasim, signals a strong commitment to supporting the business community, enhancing trade facilitation, and promoting economic development across coastal regions,” he was quoted as saying.

Officials briefed the participants that the Marine Fisheries Department had met its export target of $410 million this fiscal year through fisheries and aquaculture exports, according to the maritime ministry. Additionally, the ship recycling industry had generated a revenue of Rs6 billion ($21.1 million), reflecting the growing potential of maritime industries in the country.

Chaudhry said the government is focused on modernizing port infrastructure, streamlining customs operations, and fostering a business-friendly environment to enhance Pakistan’s competitiveness in international trade.

“The Ministry of Maritime Affairs is actively working on reforms to unlock the economic potential of vast coastline and maritime resources,” he said. “These efforts are part of a broader strategy to transform the maritime sector, boost exports, and contribute significantly to the country’s GDP.”

He announced his ministry’s plans to establish an Aquaculture Industrial Zone aimed at promoting business activities in the marine and aquaculture sectors.

“Pakistan’s first-ever Marine and Aquaculture Policy will be introduced soon to provide a comprehensive framework for sustainable development in these areas,” he said.


Share Indus water fairly or Islamabad will secure it ‘from all six rivers,’ Pakistan ex-FM tells India

Updated 23 June 2025
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Share Indus water fairly or Islamabad will secure it ‘from all six rivers,’ Pakistan ex-FM tells India

  • The statement comes days after Indian minister said ‘Pakistan will be starved of water’
  • Islamabad previously said any blocking of its water would be considered ‘an act of war’

ISLAMABAD: Former Pakistani foreign minister Bilawal Bhutto-Zardari on Monday asked India to share the Indus water fairly or Islamabad will secure it “from all six rivers.”

The statement came days after Indian interior minister Amit Shah said New Delhi will “never” reinstate the Indus Waters Treaty (IWT) it suspended with Pakistan over an attack in India-administered Kashmir. India accused Pakistan of backing the assault, a charge denied by Islamabad and one which was followed by four-day military standoff between the two countries last month.

The IWT grants Pakistan rights to the Indus basin’s western rivers — Indus, Jhelum, and Chenab — for irrigation, drinking, and non-consumptive uses like hydropower, while India controls the eastern rivers — Ravi, Beas, and Sutlej — for unrestricted use but must not significantly alter their flow. India can use the western rivers for limited purposes such as power generation and irrigation, without storing or diverting large volumes, according to the agreement.

A day after the Kashmir attack that killed 26 tourists, New Delhi announced it was putting the 1960 World Bank-mediated treaty, which ensures water for 80 percent of Pakistani farms, in abeyance. Pakistan has previously said the treaty has no provision for one side to unilaterally pull back and that any blocking of river water flowing to Pakistan will be considered “an act of war.”

“India has two options: share water fairly or we will deliver water to us from all six rivers [of the Indus basin],” Bhutto-Zardari said, while addressing the lower house of Pakistan parliament.

“The attack on Sindhu [Indus river] and India’s claim that the IWT has ended and it’s in abeyance, firstly, this is illegal, as the IWT is not in abeyance, it is binding on Pakistan and India but the threat itself of stopping water is illegal according to the UN charter.”

The former foreign minister, who recently led a diplomatic mission to key world capitals to present Pakistan’s stance on the latest crisis with India, said Islamabad had defeated New Delhi on the “battlefield, in diplomacy, and in the war of narratives.”

On Saturday, Indian interior minister Shah said they would take the water that was flowing to Pakistan to the Indian state of Rajasthan by constructing a canal

“Pakistan will be starved of water that it has been getting unjustifiably,” he told Times of India newspaper.

The latest comments from Shah, the most powerful cabinet minister in Prime Minister Narendra Modi’s cabinet, have dimmed Islamabad’s hopes for negotiations on the treaty in the near term.

Halting the water agreement was one of a series of tit-for-tat diplomatic measures taken by both countries in the immediate aftermath of the April 22 attack in Kashmir. Islamabad is also exploring a legal challenge to India’s decision to hold the treaty in abeyance under international law.

New Delhi has not made public any evidence of Islamabad’s alleged involvement in the Kashmir assault. During the four days of fighting which followed in May, more than 70 people were killed in missile, drone and artillery fire. It was the worst standoff between the nuclear-armed neighbors since 1999.