Dar intervenes to arrest slide in rupee


Orders transparent investigation into dollar price hike
Muhammad Arshad


Finance Minister Ishaq Dar, Thursday, announced to conduct a thorough and transparent investigation into the dollar price hike matter which was a result of a miscommunication and misunderstanding among some individuals and institutions.
The rupee plunged 3.1 per cent in the opening hours of interbank trade on Wednesday, sparking a shortage of foreign currency in the open market as dealers preferred to hold rather than sell. By midday, the dollar had risen to Rs108.50, before settling at Rs108.25 by close. This was the largest single drop in the rupee’s value in nine years.
Talking to reporters after chairing a meeting of over two dozen heads of banks, Deputy Governor State Bank of Pakistan (SBP), Chairman Federal Board of Revenue (FBR) and other senior officials of the Ministry of Finance to discuss this unfortunate development, Dar said that this was a unique incident or accident of its type in the country’s history.
The minister said that after the appointment of governor SBP, likely by tomorrow, the transparent inquiry would be carried out by competent and honest man of integrity to fix responsibility in this issue of national importance. He said that the inquiry might be completed in 10 days and action would be taken against the individual(s) responsible.
All transactions conducted during this time would be assessed to determine that who were the losers and gainers.
He said that not any person including himself has any authority to take such important decision related to economy (in this case artificially adjust of the dollar’s value) as there was proper mechanism to take such decisions.
Dar deplored that even the Deputy SBP governor was not informed about this important decision by certain individuals. Dar said that there was no reason for this surprising and artificial hike as market was working in routine, the forex reserves stood at $21 billion and forex market was also stable.
He expressed the hope that market would soon stabilize itself and determine the value of currency, adding that nobody could direct the market to overcome issue of under valuation. Dar said that the market has made self-correction as depicted by the dollar exchange of Thursday morning.
Dar said that the presidents of banks were summoned, along with the State Bank’s deputy governor of Banking and head of Treasury. The chairman of the Federal Board of Revenue and the finance secretary also attended the meeting which continued for two hours.