Rupee devaluation: Miftah says situation will return to normality in next few days

As the rupee continued its downward spiral unabated against the US dollar and hit the 226 mark on Wednesday, Finance Minister Miftah Ismail said the situation will move towards normality after improvement in the political situation in the next few days.

Addressing a press conference in Islamabad, Miftah Ismail said the dollar has appreciated against other currencies of the world as well. He, however, said the recent dip of the rupee against the dollar was due to the political situation in the country, Radio Pakistan reported.

Highlighting his government’s achievements, the finance minister said that the trade fundamentals have been corrected as a result of measures taken over the last few months.

He maintained that there has been reduction in imports during this period, adding that this has helped create a balance between imports and exports and remittances.

The minister pointed out that the trade deficit was $48 billion and the current account deficit stood at $17bn during the last fiscal year, which, he stressed, the country cannot afford.

Miftah said an agreement has been signed with the International Monetary Fund (IMF), categorically stating that the government will implement it. He said the World Bank and the Asian Development Bank have also opened their financing for Pakistan following the agreement.

He said some friendly countries have also assured they will help Pakistan meet its financing gap. Giving details of the assistance, he said one friendly country has pledged to provide oil worth $1.2bn on deferred payment. He said another has expressed interest to invest in the Pakistan stock market whilst another has shown interest to provide gas worth $2.4bn to Pakistan on deferred payment.

Miftah said one friendly country will deposit $2bn with State Bank of Pakistan whilst another will provide two billion SDRs.

The finance minister said we also want to sell out Balloki and Haveli Bahadur Shah Power Plants.

He said the economy is on the right trajectory, adding that there has been improvement in tax collection.

“We will enhance tax to GDP ratio and reduce the budget deficit during the current fiscal year,” said the finance minister.

He was confident that the issue of inflation will also be tackled in the next two to three months.

 

Tarin gives Miftah solution for rupee depreciation

Meanwhile, former finance minister Shaukat Tarin gave Miftah a solution to stem the continuous and unabated devaluation of the local currency against the US dollar.

In his message to Miftah, Tarin elaborated the reasons behind the rupee’s losing streak.

He also criticised the finance minister, saying that a “tsunami of inflation” is heading toward the country and yet he is insisting that the economy is fine.

Addressing a press conference in Karachi flanked by other PTI leaders, he said that after receiving no positive sign from the IMF, the government imposed Rs450 billion new taxes on the masses.

He maintained that the rupee should have been stable after their deal with the IMF but it did not bring stability to the market.

The reason behind the worsening economic situation is political instability, the former finance minister said. The major cause behind the inflation and devaluation of the rupee is that the market does not believe in the government, he added.

The only solution to the ongoing economic crisis is free and fair elections, Tarin said.

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