LAHORE: Rejecting the government’s role in devaluation of the local currency, State Bank Governor Yaseen Anwar said he believes the rupee will soon stabilise as according to international agencies the country’s credit rating is improving.

Talking to newsmen after delivering keynote address at the seventh Pakistan SME Conference here on Thursday, Anwar said the government “has nothing to do with the rupee’s depreciation”.

He also rejected the view that the government was deliberately devaluing the rupee to meet IMF conditions. “Some forces hoarded dollars with the speculation that it will go to Rs115 by June 2014. The open market’s share of dollar trading is just $20 million daily,” he added.

The governor noted that the first tranche of $540 million released by the IMF under its $6.6bn loan deal helped stabilise the foreign exchange position. “Moody’s and Standard and Poor’s (S&P) see positive outlook for Pakistan and the rupee will stabilize soon,” Anwar believed.

Earlier, the greenback stabilised in the range of Rs99 after the central bank’s intervention.

The governor said the local currency was still performing better than five other countries whose currencies have registered double-digit depreciation. “The Pakistani rupee was devalued only 5pc while that of India, Brazil and three other countries by 10pc.”

Anwar firmly rejected the notion that there has been any dollarisation or capital flight from the country.

“The central bank is vigilant, has set up counters at major airports in the country and is in liaison with Customs and other department concerned,” he said.

He added: “The currency swap agreements with China and Turkey will have positive impact on the local currency shortly.”

To a question, Anwar said the government had so far borrowed Rs575 billion from the SBP.

In his address the governor emphasised the importance of small and medium enterprises (SMEs) in developing the economy of a country, and reiterated the central bank’s support in building confidence among stakeholders.

He said the SMEs did not have access to financing from the formal sector and have been primarily relying on the credit facilities from the informal sector. The central bank was also formulating Prudential Regulations for the sector, including setting up of Credit Information Bureau, enabling commercial banks to finance the SMEs, he said.

On the occasion experts from the SME sector stressed the need to implement the SME Policy which envisaged establishment of institutions of finance, trade promotion, facilitation and guarantees.

Delegates from commercial banks, Small and Medium Enterprises Development Authority (Smeda), Business Support Fund (BSF) of the Ministry of Finance, Lahore Chambers of Commerce and Industry (LCCI), IFC-World Bank and Union of Small and Medium Enterprises (Unisame) also participated in the conference.