- Finance minister says rupee recovering because government averted threat of default
Finance Minister Miftah Ismail said on Thursday that the price of Brent crude was on a downward trend in the international market and the government will capitalise on this to provide relief to the inflation-stricken public.
Speaking at a press conference, he said that as soon as the international price of oil recedes below a certain benchmark, the government will purchase cheap fuel for the nation. He added that the recent hikes in petrol and diesel prices were necessary to "save the nation from default".
His remarks come as oil prices continued to retreat on Thursday as investors reassessed the risks of recession and the impact of interest rate hikes in major economies on fuel demand. US West Texas Intermediate (WTI) crude futures fell $1.4, or 1.3%, to $104.78 a barrel by 0643 GMT. Brent crude futures fell $1.3, or 1.2%, to $110.40.
Miftah said measures taken by the government to prevent default has helped the rupee recover to 207 against the US dollar.
The rupee had closed at 211.93 against the US dollar on Wednesday. However, it appeared to improve on Thursday in intra-day trading in the inter-bank market.
On the issue of ongoing talks with the International Monetary Fund (IMF) with regards to revival of its bailout programme, Miftah said the lender had accepted the Rs112 billion primary surplus target shown in budget 2022-23.
He also announced that China would transfer $2.3 billion loan to Pakistan by Monday.
Meanwhile he criticised the previous government, and said that four of the largest budget deficits in Pakistan were recorded during their tenure.
“The gap between revenue and expenses kept on growing,” he said. “Self sustainability cannot be achieved if the government keeps on taking loans.”
According to him, the previous government left Pakistan on a verge of default. He admitted that currently, Pakistan had a weak financial state.
In a bid to make Pakistan sustainable, he said the current leadership has introduced a historic budget which focuses on progressive taxation.
Speaking further on the achievements of the current government, he said that it had reduced sugar price to Rs70 per kg and flour price to Rs40 per kg.
“The previous government could not reduce sugar price in nearly 4 years and we did so in two months,” he said. “To contain the uptrend in ghee price and to address its shortage in the local market, we kickstarted inward shipments of the commodity from foreign countries.”
As a result, ghee is available at Rs300 per kg in utility stores across the country.