ISLAMABAD: Federal Minister for Finance and Revenue, Senator Muhammad Ishaq Dar Wednesday said the market intervention for the sake of the country is not a bad thing but the approach should be realistic.
Talking to the media on arrival at the Finance Ministry along with Interior Minister Rana Sanaullah, Dar said that the country faced deep challenges but the government would try its best to overcome them.
“Central banks all over the world including the United States and England intervene. They have a band and intervene if their currency goes up or down of that,” Dar said, adding that he is not saying that the exchange rate would not be market-based.
“We believe in the market economy but no one would be allowed to play with the local currency. The speculators or Hundiwalas do not understand that depreciating local currency by Re1, results in piling up debt by Rs110 billion,” Dar said, adding that the PTI spent more than them on market intervention.
He rejected the impression that the PML-N government in its tenure between 2013 and 2018 injected dollars in the market to keep the rupee overvalued. He said we rather took the foreign exchange reserves to a record level of 23 billion dollars. Dar said the country is facing difficult challenges but these will be tackled as was done in the past.
Replying to a question, the minister said that there are some inappropriate things in the State Bank of Pakistan (SBP) law and they would be corrected at the right time. “After my article, the PTI government itself made several changes in the SBP law and did not present the initial draft.”
Dar said that the country would be put back on the growth path as the Pakistan Muslim League (N) had a history of correcting the economy during crises.
“As a nation we had challenges, we have faced them with success in the past,” he said, while citing the examples of economic restriction following the nuclear tests of 1998 and declared macroeconomic instability of 2013.
He said that when the PML-N left the government in 2018, the Consumer Price Index (CPI)-based inflation was four percent, food inflation two percent, highest growth rate of 6.3 percent, highest reserves, interest rate at 6.25 percent, and stable exchange rate of Rs104.50 against the dollar.
Copyright Business Recorder, 2022