Elements involved in speculative trade responsible for rupee depreciation: Tarin

Advisor to Prime Minister on Finance and Revenue Shaukat Tarin has said that elements involved in speculative trade are responsible for the depreciation of the rupee against the US dollar.

Addressing a groundbreaking ceremony of a hospital in Karachi's Naya Nazimabad on Sunday, Tarin said the prices of petroleum products will further increase if there is a hike in the international market. The advisor highlighted that the government had no option but to pass the increase in the international markets to the end consumers.

Tarin, however, said that "good news" regarding the talks between Pakistan and the International Monetary Fund (IMF) is soon expected and is likely to result in rupee appreciation.

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He added that elements involved in speculative trade have caused the US dollar value to appreciate by Rs8 to Rs9 beyond its actual market price. "The US dollar should be valued at Rs167-167. At least Rs8 to Rs9 are being siphoned off by speculators."

The elements involved in speculative trade would get a hit as soon as Pakistan concludes the talks with the IMF, Tarin said.

Tarin said that three years ago when the PTI government came in power, the current account deficit was very high. To control it, the government urged friendly countries to deposit dollars with Pakistan's central bank.

"But despite all these efforts, we had to go to the IMF," he said.

The advisor said that presently, the growth rate in Pakistan is approximately 5 percent. "We are heading towards economic development step by step. Our aim is to make this growth inclusive and sustainable," he said.

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He highlighted that for the future, the government is pursuing specific targets. "We are focusing on revenues, agriculture, and taxes this time."

"This year, Pakistan collected 36 percent more revenue, of which 32 percent is from income tax. But our plan is to increase [the tax to GDP ratio] to 14 percent next year."

He pointed out that IT has a huge potential in the export market. "Last year, we witnessed a 47 percent growth in the sector. We plan to take it to $50 million. This will help us fill the import-export gap."

The advisor also hinted at placing further import curbs, saying the government will soon be increasing import duties.