Federal Finance Minister Senator Ishaq Dar on Wednesday stated that the rupee’s market value against the US dollar currently stood at Rs223.94, but per his calculations, the real value of a US dollar should be less than Rs200.
He said this while speaking on SAMAA TV show Nadeem Malik Live on Wednesday evening.
Dar explained that the main reason why the rupee had sunk to its lowest ever value was due to political instability fomented in the country. At its lowest towards the end of July, the rupee had fallen to an all-time low of Rs239.94.
While the rupee made recoveries in weeks leading up to the release of the $1.16 billion International Monetary Fund (IMF) tranche, it again fell to dangerously low territory in September, just before Dar’s return.
Dar told SAMAA TV show hot Nadeem Malik that even when he was aboard Prime Minister Shehbaz Sharif’s aircraft heading to Pakistan, the rupee started strengthening.
From Monday (September 26) onwards, the dollar has lost around Rs15.71, he added.
He went on to claim that the dollar could end up losing around Rs24 to the rupee in 24 days.
In a statement that would reassure the global lender, Dar said that he believed in keeping the exchange rate subject to market forces and that it was the responsibility of State Bank of Pakistan to monitor it.
Talking about economic pressures and priorities of the incumbent administration, Dar outlined a priority to tackle runaway inflation in the country.
“We must get down the inflation rate down to 12% to 14%,” he stated. Currently, inflation is at an all-time high of over 20%.
But one major aspect of controlling inflation, the price of petroleum products, seem to be a bridge too far – for now at least.
Dar admitted that it was binding on the government to follow the terms and conditions set by the IMF and that the government had to impose a Rs5 levy on petroleum products this month.
Not our fault
Dar clarified that the six-month old government was still bearing the worst of the decisions taken by the Pakistan Tehreek-e-Insaf (PTI) government.
With the country suffering from devastating floods leading to a global appeal by the prime minister, Dar said that while Pakistan intends to honor its repayment commitments, rescheduling loans will be the last option to be exercised.
Curiously, he said that rescheduling loans from the Paris Club was not a priority for his government.