- Miftah Ismail believes that efforts to reduce imports and an expected daily increase in incoming dollars will relieve pressure on the rupee.
- According to the report, Pakistan purchased petroleum products worth Rs3.8 million and paid for them in July, which put a lot of pressure on the rupee.
- Imported automobiles, mobile phones, and home equipment are still prohibited for the time being, according to the finance minister.
Miftah Ismail Pakistan’s finance minister said on Sunday that the Pakistani rupee, which has taken a beating against the US dollar in recent weeks, should improve “in the next two weeks.”
Ismail was giving a press conference about Pakistan’s economic future.
Ibelieve — and I never like to speculate on the currency market — that the rupee’s true value is far greater [than it is now],” the finance minister said.
He explained that Pakistan had to part with “a billion and another billion” in the last two months, putting pressure on the local currency.
Ismail stated that Pakistan purchased petroleum products worth Rs3.8 million and paid for them in July, which put a lot of pressure on the rupee.
“The State Bank had to pay $800 million more this month compared to the country’s inflows,” he added.
Ismail stated that efforts will be directed toward increasing daily inflows and decreasing outflows in the coming month. “With our efforts to reduce imports, and InshaAllah, with the daily rise in incoming dollars versus a decline in outgoing units, there will be a dollar surplus,” he predicted.
“This will relieve pressure on the rupee, and the dollar’s value against the rupee should fall slightly,” the minister added.
Ismail expressed optimism that the “next two weeks will, inshaAllah, be better.”
He cautioned, however, that while he believes “the fundamentals are in Pakistan’s favor,” “speculation and sentiments also play a role in this.”
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Import Ban :-
According to the finance minister, the Economic Coordination Committee (ECC) has recommended lifting the import ban. Several items will no longer be prohibited if approved by the cabinet and signed off on by the prime minister. However, imports of cars, cellphones, and home appliances will remain prohibited.
“Current account to move into surplus in a year” :-
According to Ismail, the government wants to turn the current account deficit into a surplus. “Over the next two to three months, we will raise exports,” he added, adding that in the short term, imports have decreased.
‘Priority only to save Pakistan from default’
Ismail questioned the finance minister on the government’s efforts to stop the growing inflation. The finance minister responded as follows: “Every finance minister has inflation control and economic growth as their top priorities. Controlling inflation or fostering growth has never been my top objective. I’ve just had one priority: keeping Pakistan from going bankrupt.”
He used the example of Sri Lanka, which just declared bankruptcy, to highlight how dire a scenario the nation could have found itself in before being “rescued”.
“Recently, petrol in the country cost 90 rupees and was sold for 3,000 rupees on the illicit market,” the minister stated. “Hospitals closed owing to medicine shortages. Women would stand in line for three days to buy gas to power their stoves.
“PTI brought the country dangerously close to default” :-
Ismail criticized the previous administration, claiming that the PTI-led administration raised the nation’s debt by Rs20,000 billion, or 79%, over the previous three years and nine months.
He claimed that the current administration did “nothing that would push the nation dangerously close to default.” Imran Khan and PTI were responsible for the nation’s current predicament, he claimed.
According to the finance minister, the country’s debt was $24,952.9 at the time the PML-N government left office. When we returned right now, it had increased to about $45,000.
He added that “the policies of Shaukat Tareen and Imran Khan have a significant hand” in the country’s current account deficit and blamed the PTI government for it. The previous administration, he continued, was responsible for the “four largest budget deficits” in the nation.
They were unable to equal the PML-tax-to-GDP N’s ratio in any given year, he continued.
Ismail stated that debt will inevitably grow if tax revenues are consistently reduced as the budget deficit rises. He added that Pakistan will have to pay $4,000 billion in interest payments this year alone.
Due to the aforementioned reasons, the finance minister acknowledged that a “very challenging” budget was passed.