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Pakistan

Dar reiterates stance on Pakistan’s currency, calls rupee undervalued

  • Newly-nominated Leader of the House in Senate wants stakeholders to come onboard to resolve exchange rate issue
Published November 27, 2023

Pakistan Muslim League-Nawaz (PML-N) leader and Senator Ishaq Dar on Monday called on stakeholders to come onboard to resolve the exchange rate issue as he emphasised that Pakistan’s currency is still undervalued.

Speaking to the Senate session, the former finance minister – widely seen as an advocate of a strong rupee – said devaluation does not support Pakistan’s exports, unlike the way it does in China, because its foreign shipments are highly dependent on imports.

He reiterated that devaluation is the “mother of all evils” while supporting the recent strict measures by the interim government.

“Around 91% of the economy is destroyed due to rupee devaluation,” he said, reiterating his firm stance that Pakistan’s rupee is stronger than its value.

PM nominates Dar as leader of house in Senate

“Pakistan’s currency remained stable in the PML-N led government back in 2013,” Dar said, refuting allegations of intervention in the State Bank of Pakistan (SBP) to control the rupee.

Intervention in the SBP was more during the Pakistan Tehreek-e-Insaf (PTI) government from 2018 to 2022 before the end of the government, he claimed.

“Exports increased by $800 million in the first three years of PTI, but it added $20 billion to the country’s loans,” Dar said. “When we left the government in 2018, debt was $70 billion and when PTI government was removed, debt was $100 billion.

“I firmly believe that Real Effective Exchange Rate (REER) is the way to see the rupee value. Its a scientific method.”

The former finance minister said that the central bank does intervene to support the rupee but to a certain level and as per its capacity.

“The SBP doesn’t have that much money that it could intervene like the Bank of England or Bank of Japan.

“In the PTI-led government, intervention made by the SBP were around of $7-8 billion, while in the previous PML-N led government (2013-2018) SBP injected $5-5.5 billion to stabilise the rupee,” Dar said.

Regarding the 16-month Pakistan Democratic Movement (PDM) government, Dar claimed that some international forces were up in their arms using the international financial institutions (IFIs) to ensure Pakistan defaulted.

Govt will make an example of those involved in smuggling, hoarding: interim interior minister

He also supported the current caretaker government’s strict measures against currency dealers, saying it was “Ishaq Dar’s formula”.

“The B and C categories have been removed and the A category of exchange companies is working and that too under strict monitoring, which is good and we all should support this,” Dar said.

The former finance minister reiterated that the government should negotiate with the international institutions and convince them about the REER.

Also read:

Comments

200 characters
Salim Nov 27, 2023 07:01pm
Dar is still living in another planet. Old habits die hard!
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KU Nov 27, 2023 08:42pm
Simply a farce, and most certainly a trick up his sleeve which will be shown in the coming days. Why are we cursed with these politicians who have brought us to bankruptcy?
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faisal Nov 27, 2023 08:44pm
He is pleasing the mafia and crony capitalists. They are pretending everything is normal. Look at 3 month new government local debt that has touched 2 trillion. It is four times more than normal. Add the high interest rate, and you can imagine the huge crises next year and onwards.
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Johnny Walker Nov 27, 2023 08:53pm
Whatever you can say about Dar ul Disaster, one thing you can credit him with is that he is stubborn and stupid. He will be the next Finance chief and then Pakistan can kiss goodbye to all sense, or whatsoever is left of it.
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Ch K A Nye Nov 27, 2023 09:02pm
@Salim, His limited intellect and tunnel vision allows him only to keep on trying the same thing over and over again and expecting different results.
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Amir Nov 27, 2023 09:14pm
Mr Dar should fade away into the sunset like his boss also should!
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Ghazanfar Ali Nov 27, 2023 11:16pm
This stupid munch was saying Rupees actual value is less tha 200 last year and now he is saying REER is Rs. 244 per USD. Who is responsible for 20% devaluation in one year? Just wait next year this bastard will be advocating REER is 350 and we will not tolerate devaluation in our currency.
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Amigo Nov 28, 2023 01:57am
Withdue respect to all those who criticized Mr. Dar, if u know some thing about Economics, and Finance please write yr opinion. And if u don't have proper Knowledge then pay respect to yr seniors. God bless us all. Aameen Regards
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All Nov 28, 2023 06:55am
He still has audacity to speak. Shameless person he is…
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Ch K A Nye Nov 29, 2023 05:05pm
@Amigo, here is my opinion: DAR is an accountant whose only skill is laundering. His blowhard BS about REER smacks of trying to fool people. He believes that lies will convince the IMF and other lending agencies/banks to carry on propping up his crazed policies.
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