Pakistan’s new finance minister wants to take country out of ‘economic rut’

Sign up now for FREE unlimited access to Reuters.com

  • Pakistani Ishaq Dar says he will take on the role of Fin Min
  • Dar says he wants a stable and strong currency
  • Appointment comes at the time of the economic crisis, flooding

KARACHI, Pakistan, Sept 26 (Reuters) – Pakistani Prime Minister Ishaq Dar said on Monday he will assume the role of finance minister for the fourth time in a strong and stable rupee.

Ahead of his formal appointment, the rupee had risen throughout the day after reports he would take the role, a change that comes amid an economic crisis in Pakistan that has been exacerbated by deadly floods.

“Prime Minister Shehbaz Sharif has asked me to take on the duties of finance minister,” Dar said in a statement aired on state television Monday night. “By the grace of God, I will do my best to get Pakistan out of this economic rut.”

Sign up now for FREE unlimited access to Reuters.com

During a previous term that ended in 2017, Dar said Pakistan would become the world’s 18th-strongest economy, but the South Asian country is facing economic turmoil, exacerbated by widespread flooding, which is estimated to have cost nearly $30 billion have tasted.

Also Read :  Gig Economy Market [2022-2027] Size, Share, Growth Rate |

Dar takes office for the fourth time with the challenge of pulling the economy out of one of its worst balance of payments crises, which has seen foreign exchange reserves down to a month of imports.

The IMF Board last month approved the seventh and eighth bailout reviews, allowing for the release of over $1.1 billion.

“Interest rate was at its lowest, growth at its highest, God bless in decades, other macroeconomic indicators were excellent, reserves were at their highest, rupee was stable,” Dar said Monday of his 2013-17 tenure.

“So we’re going to try to get in that direction, that we’re going to stop the economy from declining and change its direction.”

The rupee rose 1.1% in interbank trading and over 3% in the open market after opening firmer in Monday’s morning session as investors awaited Dar’s appointment, the state bank and the Forex Exchange Association said .

Also Read :  Why 2023 will be like 1967’s ‘Summer of Love’ for the stock market

Dar has favored a strong currency in his previous tenures as finance minister – 1998-99, 2008 and 2013-17.

“The dar factor plays a role. There are reminders of how he kept the dollar stable,” said Fahad Rauf of Ismail Iqbal Securities.

“There is no way (the rupee) can sustainably move against the tide in the current scenario,” Rauf said, referring to the dollar’s strengthening against all currencies.

CHANGE IN TIMES OF ECONOMIC CRISIS

Current Finance Minister Miftah Ismail said Sunday he would be stepping down – the fifth holder of the post to be sacked in less than four years amid ongoing economic turmoil. Continue reading

“God is sending me back to the same office,” Dar said in a video statement broadcast by local TV stations, referring to the Treasury, which he resigned after he flew to London for medical checks in 2017 amid pending corruption cases , which he says were politically motivated.

His arrest warrants have been stayed by an anti-graft court until October 7, allowing his return to Pakistan.

Also Read :  Bank CEOs increasingly turning pessimistic on economy | News, Sports, Jobs

The ruling party has repeatedly said it has inherited a ruined economy from former Prime Minister Imran Khan, who was ousted in a no-confidence vote in April – an accusation Khan denied.

When the new government took over, the bailout program with the IMF stalled due to the lack of an agreed policy framework.

Ismail said he pulled the country out of a near default but markets did not react positively as the rupee fell to a record low and inflation surged over 27%.

Unpopular decisions Ismail made to comply with IMF preconditions, including reversing electricity and fuel subsidies granted to Khan in his final weeks in power, sent inflation soaring to over 27% and the rupee up fall to an historic low.

Sign up now for FREE unlimited access to Reuters.com

Writing and reporting by Asif Shahzad in Islamabad; Edited by Andrew Heavens and Nick Macfie

Our standards: The Thomson Reuters Trust Principles.