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Markets Print 2022-10-30

Dar takes major steps to tackle rupee volatility

  • Minister for Finance asks banks and ECs to avoid manipulation of the dollar, warns of strict action if institutions are found involved in unlawful practices
Published October 30, 2022

KARACHI: Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar has initiated efforts to control volatility in the exchange market and keep the exchange rate at its real value.

The Federal Minister for Finance Saturday held meetings with banks and exchange companies to discuss the economic situation and issues related to the exchange rate. These meetings were held at the State Bank and Special Advisor to Prime Minister on Finance, Tariq Bajwa, Special Advisor to Prime Minister on Revenue, Tariq Pasha, SBP Governor Jameel Ahmad and senior officers from the Finance Division and the State Bank of Pakistan were in attendance.

Open market sees massive shortage of USD

During the meeting, the Minister of Finance warned of strict action against those institutions, who will be found involved in unlawful practices. He strictly asked banks and ECs to avoid manipulation of the dollar.

He said the government’s first focus is to improve the economic situation and other issues will be the focus, after the improvement in the economic situation.

US ambassador calls on Dar

The Finance Minister mentioned that after his arrival to Pakistan, the exchange rate was gradually improving, however, the market is again volatile for the past few days.

He said the economic situation is improving and soon the dollar will be seen weakening and the rupee getting stronger. “The real value of the dollar is below Rs200 and very soon we will bring the exchange rate to this level,” he added.

Dar asked banks and ECs to keep the business practices fair and help the government to bring the dollar rate down in the domestic market.

The Finance Minister also warned that action will be taken against those who will make unauthorized purchases of dollars. The SBP will take strict monetary and regulatory action against manipulators, he added.

During the meeting, Malik Bostan, Chairman Forex Association of Pakistan presented a number of suggestions and urged the government to review trade policies with Afghanistan. Trade with Afghanistan should be on a barter system or in Pak rupee, he suggested.

He also requested Dar and the SBP that ECs should be given the status of the export industry and more incentives should be provided so they could bring more home remittances through legal channels. Meanwhile, according to a ministry of finance statement, Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar held a meeting with heads of all the major foreign exchange companies of Pakistan at the State Bank of Pakistan.

The finance minister highlighting the economic situation of the country stated that the government with its pragmatic policy decisions has not only arrested the PKR decline but also set the economy in the right direction.

He also shared the priorities of the present government and expressed resolve of the government to ensure stable economic and fiscal policies and requested forex companies to ensure appropriate exchange rate for the betterment of the country.

The leading Exchange companies of Pakistan showed complete trust in the government’s fiscal and monetary policies and committed to the finance minister their full support to ensure economic and financial strengthening of Pakistan.

Copyright Business Recorder, 2022

Comments

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Osama Malik Oct 30, 2022 12:31pm
The headline is misleading. Apart from issuing verbal threats, what practical steps has Dar taken to curb rupee volatility? Sure, he might harass a few bankers and money changers going forward, but even a sub-inspector can do the same. The fact is that Dar's jawboning will lose gradually lose market-moving power as it becomes clearer that he has absolutely so clue about how to improve the situation.
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Fazeel Siddiqui (Overseas Pakistani) Oct 30, 2022 03:51pm
Fake economy turns to threat economy. These are the brains of this country out of 240 million people? PDM motto is bring by come whatsoever USD at Dar's wish number 200 and get away for elections. That's not going to happen as real value of USD per indicators is around 275.
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Fazeel Siddiqui (Overseas Pakistani) Oct 30, 2022 04:26pm
Exchange Overseas Pakistanis FX remittances to PKR on forced 25-50% lower rate at SBP, that amounts to $4 to 5b per year loss ($20b loss aggregate) to OPs to make available cheap & discounted dollar for importers & money launders. Robin hood technique? Govt makes its taxes revenue on imports turnover. Wao. This is how Mr Dar in previous PML-N government when maintained dollar “under control”.
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