And more Darnomics
Of course the devaluation was “artificial”. Yes, currencies have been known to experiences sudden falls through the floor. And, yes, the reasons have, more often than not, been political. But that takes a Black Swan event—successful coup, failed coup, Brexit, etc—not an unelected daughter of a prime minister appearing for a scheduled hearing. But just how, going by Dar sb’s logic, would an individual (obviously very highly placed) at the state bank draw political mileage by associating a currency collapse with Maryam Nawaz? Especially when the so-called collapse (3.1pc, after three years steady, despite the traditional 5pc annual dip) has been a crying need for quite a while considering the 20pc over-valued currency and a black hole of a current account deficit?
Yet this was anything but a proper, however much sensible, devaluation. The Bank is supposed to lay the groundwork for a devaluation, and make preparatory calculations in consultation with the finance and commerce ministries, not suddenly pull the plug one fine day; causing a very predictable paralysis in the inter-bank market. However, the decision to bully the rupee back to where it was is even stranger. It is not for the finance minister to place himself in the currency debate. But Dar sb is a unique finance minister. He regularly punches above his eight in political matters, freely unleashes his Darnomics upon the economy, has been perhaps the only finance minister to announce an interest rate decision, and now also controls the currency market, even as his sense of rationality clearly worsens the rupee and the deficit, at least.
