KARACHI: Finance Minister Ishaq Dar reaffirmed that the US dollar would be devalued to below Rs200 and gave stakeholders the assurance that the nation was in a “solvent situation,” fully able to meet its domestic and international debt obligations.
On Saturday, Mr. Dar met twice with the CEOs of big exchange businesses and commercial banks.
Senior members of the Finance Division of the central bank as well as Special Assistant to the Prime Minister (SAPM) on Finance Tariq Bajwa and Revenue Special Assistant to the Prime Minister (SAPM) Tariq Pasha attended the discussions.
Mr. Dar reviewed the government’s aims with the bank CEOs during the meeting, and he reaffirmed his commitment to ensuring stable fiscal and economic policies.
Meetings are held with commercial banks and exchange firms, and the dollar rate is predicted to fall below Rs 200.
The country’s financial status is “totally solvent,” the finance minister assured the banks, and the government is dedicated to upholding its domestic and international obligations.
He emphasised the country’s general economic outlook, claiming that it was on a trajectory due to the current administration’s realistic and far-sighted measures.
The minister cautioned the smugglers to desist from stockpiling and exchanging dollars at his meeting with the chiefs of exchange companies.
Given that it was presented in front of the exchange businesses, some experts thought the warning might possibly be directed at them.
Representatives of the exchange companies, who were there, claimed the minister “was easy on the exchange companies” and encouraged them to support actions taken to stop dollar smuggling.
Meanwhile, he also requested the forex companies to ensure an ‘appropriate exchange rate’ for the betterment of the country.
He said the current government, with its “pragmatic policy decisions”, has not only arrested the decline of the economy but also set it in the right direction.
Zafar Paracha, secretary general of the Exchange Companies Association of Pakistan, said Mr Dar warned of action against dollar hoarders.
The finance minister assured that the rupee would soon appreciate since the dollar’s real price was below Rs200, Mr Paracha said, adding that Mr Dar also referred to the previous PML-N government when the dollar was “under control” and the interest rate was in single digits against 15 per cent at present.
The meetings have come at a time when Mr Dar was scheduled to visit China from Nov 1 with several proposals, including a loan rollover request to help Pakistan temporarily avoid a default-like situation.
Meanwhile, Pakistan, which is struggling to plug its fiscal deficits, is looking towards external creditors to stabilise to the dwindling economy.
So far, the government has held successful negotiations with the IMF to resume the loan programme, received $1.5 billion from ADB, and secured World Bank’s assurance to support disaster-related projects with $2bn.
However, the international support and inflows failed to stabilise the exchange rate, as SBP’s foreign exchange reserves kept falling due to regular debt servicing.
The conversations have taken place just before Mr. Dar is due in China on November 1 with a number of suggestions, including a request for a loan rollover to assist Pakistan in temporarily avoiding a default-like situation.
Pakistan, which is attempting to close its fiscal imbalances, is appealing to foreign creditors to help stabilise the economy.
To date, the government has successfully negotiated with the IMF to resume the loan programme, received $1.5 billion from ADB, and obtained the World Bank’s commitment to provide $2 billion in support for disaster-related projects.
The SBP’s foreign exchange reserves, however, remained decreasing as a result of routine debt servicing, therefore the international assistance and inflows were unable to stabilise the exchange rate.
Since the dollar began to overtake the rupee, the government and SBP have been attempting to control exchange businesses.
However, a number of issues were impeding their efforts, particularly a lack of foreign exchange reserves and an expanding trade deficit.
Comments are closed.