Federal Information Minister Fawad Chaudhry, on Friday, announced a “full-fledged” crackdown against the hoarding of US dollars and speculative currency trade in the country.
The government had directed the Federal Investigation Agency (FIA) to launch a joint operation with the State Bank of Pakistan (SBP) and the Ministry of Finance in this regard, he added.
A few hours earlier, Finance Minister, Asad Umar, had claimed that no further rupee devaluation was likely. He was referring to the loss of nearly 25 per cent in its value over the past year. The minister urged people to invest in the stock market and not waste money buying dollars. Rumours should not be spread as they damage the market, he stressed.
He expressed these views while talking to a group of journalists in Islamabad on Friday. The minister held the ongoing speculations in the local money market responsible for sparked an increase in the dollar-rupee exchange rate. The financial situation had been made worse by the “fake news” making rounds on social media, he added.
Minister Umar affirmed that since the SBP had declared that the dollar-rupee balance had reached its equilibrium level, there would be no further devaluation of the rupee.
Reiterating that no demands had been made by the International Monetary Fund (IMF) with regard to the exchange rate or rupee devaluation, he stressed the need to stop the speculations so that the local currency can be stabilised.
The minister added that a currency should be aligned with its fundamentals. The real effective exchange rate (REER) in January 2018 was Rs 127 against the US dollar, which was 27 per cent overvalued at the time, he maintained Umar also censured former finance minister Ishaq Dar for adding to the devaluation speculations through his recent statements made on television.
Therefore, he asked all such speculators to stop spreading rumours. Not doing so would leave the government with no other option but to take them to the court and deal with them according to the law, he warned.
The finance minister cried that the Pakistan Tehreek-e-Insaf’s government had inherited a fragile economy with rising fiscal and current account deficits and a declining foreign direct investment.
He recalled that before they had assumed office, the local currency had devalued from Rs105 in December 2017 to Rs 127 against the US dollar by July 25, 2018; witnessing a devaluation of Rs 22 at the time.
The minister admitted that there had been a rise in inflation but he was still of the view that the present situation was still better when compared with the first eight months of the governments of the Pakistan Peoples Party (PPP) and Pakistan Muslim League-Nawaz (PML-N).
In a similar development, he noted that economic stability was his government’s foremost priority while addressing a gathering at the Pakistan Stock Exchange through video link, on Friday.
He maintained that despite their presence in Pakistan, companies with large setups were only fulfilling the domestic needs. The collective value of Pakistan’s economy was $300 billion, he asserted. The finance minister remarked that we need to transform our laws for international investments while adding that economic stability required practical steps, for which the incumbent government was working hard.
Umar urged the industrialists to invest in the local market. The gathering was attended by businessmen and stock directors.
