Pakistan Senate Rejects Demonetization Move

Pakistan’s Ministry of Finance has ruled out the Upper House of Parliament’s proposal to discontinue the Rs 5,000 currency note in a bid to reduce the size of informal economy in the country. The ministry said there was no plan to scrap the currency note.

Following India’s demonetization move of banning currency notes of Rs 1,000 and Rs 500 in a bid to flush out black money, Pakistan’s upper house decided to follow suit. However, the finance ministry took the decision saying it would end up hurting business prospects, APP reported.

“Given the continuing use of cash in transactions, the government believes that discontinuation of the Rs 5,000 rupee note would adversely affect the efficiency of exchange in business,” the Dawn publication cited the ministry’s statement as saying.

The demonetization move or banning Rs 5,000 note would reportedly have a negative impact on Pakistan’s economy.

Additionally, the ministry said that the upcoming “National Financial Inclusion Strategy” being pursued with the State Bank of Pakistan would reduce the country’s dependence on currency. During the last financial year, Rs 5,000 denomination currency notes accounted for 17% of the total notes printed, Reuters reported.

Further strategy includes digital transactions and branch-less mobile banking. “This is the way to move forward for promoting documentation in the economy rather than by cancelling any existing denomination,” Reuters cited the statement as saying.