Former finance minister Ishaq Dar on Monday heaped praises on himself for own policies for the strengthening local currency and credited himself for the Pakistani rupee’s appreciation over time against the US dollar, saying the state’s intervention in the forex market was crucial to keep the currency stable.
“The Leader of the House in the Senate expressed his perspective on the rupee’s depreciation, deeming it as a significant economic challenge. He attributed the current appreciation of the rupee against the dollar to the implementation of the ‘Ishaq-Dar’ policy. This statement was made in the Upper House of Parliament, following decisive actions by the caretaker government against those engaged in dollar smuggling and speculative activities.”
But the International Monetary (IMF) has stressed, in a statement after Pakistan and the lender reached a staff-level agreement on the first review under a short-term deal for $700 million, that the rupee must remain market-determined to sustainably alleviate external pressures and rebuild reserves.
The rupee is expected to trade in a narrow range against the US dollar this week, as importers and exporters weigh the impact of mixed economic signals on the country’s currency. It closed at 285.64 in the interbank market today.
“The real exchange rate today is 244 to the dollar. Some of our institutions have way too much autonomy, but let me tell you,’ spoiled children deserve the rod’.”
Dar, who has served as the finance czar twice under Nawaz Sharif and once under Shehbaz Sharif’s regime, said: “A major reason behind our economy’s destruction is the fall in the rupee’s rate against the dollar.”
The senator reminded his colleagues that in 2014 and four years following that, until his removal as the finance minister, the rupee had remained stable. “The central bank’s intervention was only to a certain extent.”
“He asserted that, in the tenure of the Pakistan Tehreek-i-Insaf (PTI), the State Bank of Pakistan (SBP) has been more active in intervening to manage the value of the rupee compared to the periods under the Pakistan Muslim League-Nawaz (PML-N).”
“I am considered an enemy of rupee devaluation by a financial institution. However, after giving in to the demand of the same financial institution, the PTI allowed the devaluation of the rupee. See, what happened after that,” he said, claiming it ballooned Pakistan’s loans.
The senator from PML-N emphasized the importance of reaching a consensus among all stakeholders to regulate the value of the rupee. He stated, “Policies implemented by certain individuals may persist even after their departure, resulting in a rise in commodity prices, impacting the lives of the people.”
FAQs About Ishaq Dar Claims Credit For Rupee’s Rise Against Dollar
What is the reason for Pakistani rupee depreciation against the dollar?
There are several factors contributing to the devaluation of the Pakistani rupee in comparison to the US dollar. These include a trade imbalance, political instability, inflation, interest rates, debt burden, and a lack of foreign investment.
What is the reason for dollar increase in Pakistan?
Since the dollar is not Pakistan’s mainstream currency, its fluctuations are based on supply and demand, much like other commodities in the market. Dollar’s supply has five possible sources: exports, remittances from overseas Pakistanis, foreign investment in Pakistan, foreign aid, and foreign loans.
Why is Pakistani rupee getting stronger?
An increase in foreign direct investment increases the demand for the recipient country’s currency, and boosts its exchange rate.
Why is Pakistan currency falling?
Pakistan’s high debt payments and an external funding gap are weighing on the rupee. The country was on the brink of a default this year, and falling investments from overseas and Asia’s fastest inflation are adding to its woes. Remittances also stay muted, making it more dependent on foreign aid for dollar flows.
How does rupee depreciation affect Pakistan economy?
The consistent depreciation of the rupee has far-reaching consequences for Pakistan’s economy: Inflation: Rupee devaluation leads to an increase in the cost of imported goods and raw materials. This, in turn, drives up domestic prices, causing inflationary pressures that impact the cost of living for citizens.
Conclusion
The claim made by Ishaq Dar regarding the credit for the Rupee’s rise against the Dollar opens up a multifaceted discussion on economic policies, historical contexts, and global economic influences. While Dar attributes the strengthening to his past measures, it is clear that the situation is far more complex. The interplay of various factors, expert opinions, public reactions, and government responses collectively shape the economic narrative.
