Obstacles to economic stability have been removed; due to the government’s wise decisions, the economy is stabilizing — Muhammad Aurangzeb. (File Photo)

Federal Finance Minister Muhammad Aurangzeb has said that in his opinion, there is room to reduce the interest rate, but the decision lies with the State Bank.

While speaking to the media in Karachi, Finance Minister Muhammad Aurangzeb said that due to the government’s measures, the economy is moving toward stability, and this is because the hurdles in the path of economic stability have been eliminated.

He added that both local and international investors are being engaged. In the financial year ending June 30, multinationals repatriated $2.3 billion in profits. The issues of profit repatriation by foreign investors and delays in opening LCs (Letters of Credit) have been resolved.

The Finance Minister said that banks, in collaboration with investors, should work to revive sick industrial units.

He also said that the increased powers of the FBR (Federal Board of Revenue) pertain to sales tax, not income tax. Today, he met with the State Bank Governor and the heads of commercial banks to discuss the role banks can play in economic stability, emphasizing that banks have a crucial role in economic development.

He stated that the government has reduced its expenditures and is also working to bring down the circular debt.

Muhammad Aurangzeb further said that banks should play a role in privatization, and they can be instrumental in reactivating struggling industries.

In response to a question, the Finance Minister said that as much relief has been given to salaried individuals as the fiscal space allowed. Tax returns have been simplified for salaried people, and an easy-to-use form has been uploaded to the FBR website. This form will also be provided to small traders and SMEs.

He concluded by saying: “Which finance minister wouldn’t want immediate growth? But then, foreign exchange reserves come under pressure and fall. In my view, there is room to reduce the interest rate, but the final decision rests with the State Bank.”