Govt to introduce measures to stabilise currency market: Miftah

Federal Minister for Finance and Revenue Miftah Ismail has said that the government will introduce a string of policy measures in the coming days, which would stabilise the currency market, refraining from disclosing the actions that would be taken.

Speaking during Geo News' programme 'Aaj Shahzeb Khanzada Kay Sath' on Monday night, the finance minister admitted that there is a shortage of dollars in the market.

“Earlier in August, the dollar rates offered at the kerb market were lower than in the inter-bank. However, a rise in demand for dollars from Afghanistan has driven up rates. Thus, the greenback inflow coming from the kerb into inter-bank market has dwindled,” he said.

His statement comes at a time when Pakistan's rupee has come under renewed pressure, sustaining losses against the US dollar for the seventh successive session on Monday. It settled with a depreciation of 0.71% at 229.82 in the inter-bank as a shortage of greenback kept the local currency under pressure.

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Miftah said the government would adopt measures to bring the dollar rate downwards, and unlike the previous government would not resort to any knee-jerk or populist decisions.

The finance minister, without naming the banks in question, said certain institutions have taken advantage of the ongoing market volatility, and are involved in selling dollars at higher rates.

“The prime minister has taken notice of this and has demanded a report from the central bank governor. The State Bank of Pakistan has also issued show-cause notices to eight banks. After due process, these banks will be penalised. We will hurt these banks."

On curbing speculation in the currency market, Miftah said that there is a need to take both administrative and market-based measures.

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Miftah said the government is taking measures to revitalise the economy. “After floods, we need to redouble our efforts. The prime minister has formed two committees, under which we will assess energy imports, and foreign exchange,” he said.