Citibank Pakistan is satisfied with the current economic policies of the government and has called for the continuation of these policies for an economic turnaround.
The senior management of the bank has endorsed the economic stabilization measures taken by the government. Citibank Pakistan arranged a media roundtable at its office for insight on economic and financial issues. During the roundtable, Citibank officials discussed a number of issues including the economic outlook, FATF and risks to the economy.
The CEO was accompanied by his senior team at the headquarters of Citibank Pakistan in Karachi and spoke with business reporters in a frank, fast moving exchange that was announced at the outset to be entirely on the record.
Citibank Pakistan's CEO said that things are turning around and there are fundamental changes on the economic front. Pakistan's current account deficit is under control, imports are declining, trade is increasing, overall markets are stabilizing, the exchange rate is favorable, investor confidence is returning and notable fundamental changes are visible on the fiscal side. With all these developments, the overall economic outlook is positive, he added.
He commented that Pakistan's economy had to suffer due to exchange rate fixation, however, the market based exchange rate will help reduce current account deficit, boost tax collection and create new jobs. In the past, inflows of Coalition Support Fund (CSF) had largely supported Pakistan's current account, which was out of control in 2017. At present, there are fundamental changes in the economic front.
He said that surplus current account always supports the economy and initial estimates indicate that for the second consecutive month, the current account deficit will remain in surplus in November 2019.
Talking about the issuance of new bonds, Lodhi said that for the first time the govt has planned to launch Panda Bonds in the Chinese market. The homework on the issuance of Panda Bonds has been completed and the launch is expected shortly, he added.
Talking about the new ventures, he said that currently, a number of foreign companies are looking for investment opportunities in Pakistan in households, renewable energy, and the LNG sector.
The government is also working on import substitution and it will also help boost domestic production. Improvement on the external account will increase the country's ability to pay off external loans, added the officials. The Citibank officials said that the IMF program is good for Pakistan as the Fund is asking for implementation of economic reforms that are required for long term growth.
Nadeem Lodhi, CEO of Citi Pakistan, said,
If the current political regime, where political leaders and army look united, continues for the next two years, things will be much better.
While commenting on the FATF issue, Lodhi said there are some challenges on the system side and hopefully the economic team will manage these challenges well. Blacklisting (of Pakistan) on FATF is not a probability now or at any other time, the CEO added.
Moiz Hussain Ali, the Country Head of Treasurer and Markets Citibank Pakistan, termed the FATF a geopolitical issue.
FATF is a geopolitical or political issue as Afghanistan is on a white list, but Pakistan is on the grey list of FATF, he added. He further said that Pakistan's regulator is very strong and has made whatever they had to implement in the financial industry.
Our (Citibank Pakistan) business will not be affected due to FATF as we can handle the situation.
Citibank officials say that Pakistan is attracting more portfolio investment and investment in Special Convertible Rupee Account has reached $1.3 billion.
Moiz also turned down all talk of risks posed by foreign investment in short term government debt, the so called hot money coming into T bills.
Foreign investment in government papers can serve as a catalyst to revive economic activity. The investors are testing the waters, once they have some experience in local debt markets, they will start to go long as well.
Source: Pro Pakistani