Stronger rupee brings smile back on Dar’s face

  • FM says exports have shown 6.2 per cent growth while the rate of inflation is currently 8.6 per cent
  • Says ‘we are on track to achieve six per cent GDP growth rate in three years’

Finance Minister Ishaq Dar on Wednesday said he was optimistic about an economic recovery after the rupee breached the psychologically important 100 to the dollar mark.

The currency had been losing its value against the greenback since Prime Minister Nawaz Sharif’s PML-N government came into power in June last year, sliding from 97 rupees to the dollar to a low of 108 in December.

Since then it has mounted a recovery and as of Wednesday evening the rupee was trading at 97.90 to the dollar.

Addressing a press conference, Dar said: “The price of onions, tomatoes and dollars has been brought down to the level when Prime Minister Nawaz Sharif took oath.”

“It is a positive development for the economy and will boost investors’ confidence into Pakistan,” Dar said, adding the government was not resorting to injecting reserves from the state bank in order to stabilise the currency.

“We did not use State Bank money to strengthen the rupee, but persuaded exporters to bring back their money to Pakistan and checked currency speculation, which resulted in the rising value of the rupee,” he added.

Dar said that revenue from tax collection, which has traditionally been problematic, had increased by 17.7 per cent and the budget deficit was down to 3.1 per cent as compared to 4.1 per cent in the first eight months of last year. He added that overseas remittances by Pakistanis abroad stood at $9.23 billion, representing an 11 per cent growth compared with last year.

Dar said that exports have also shown a 6.2 per cent growth while the rate of inflation was currently 8.6 per cent. “We are on track to achieve six per cent GDP growth rate in three years and Pakistan can emerge as a strong economy in the region,” Dar said.

The IMF approved a $6.7 billion bailout loan package for Pakistan in September last year to help the struggling nuclear-armed country achieve economic reforms, particularly in its troubled energy sector.

The IMF said Pakistan’s economy was picking up, with growth expected to reach about 3.1 per cent in 2013/14 compared to its earlier estimate of 2.8 per cent.