No possibility of capping dollar against rupee at fixed rate: Miftah Ismail

ISLAMABAD: Without making a commitment to an exact time-frame for materialising dollar inflows from friendly countries, Minister for Finance Miftah Ismail on Thursday ruled out the possibility of capping the US dollar against the Pakistani rupee at fixed rate, saying the free market exchange rate will continue to persist.

“We cannot cap the US dollar as it is against rules and conditions of the IMF and World Trade Organization (WTO) and free market will continue to persist in the country. The political instability and sentiments have caused pressure on exchange in the last three days. It is hoped that the exchange rate will be normalised next month,”

Minister for Finance Miftah Ismail said in a joint press briefing along with Minister for Defence Khawaja Asif here at the PID Center on Thursday.

When asked about the exact time-frame for materialising dollar inflows for providing stability to the market, Miftah said that billions of dollars transaction and agreement could not be materialised within three days, so it would take some time and the media would be apprised of it accordingly when it gets finalised.

When asked about the justification of granting Executive Allowance to grade 17 to 22 bureaucrats, Khawaja Asif said that perks and privileges of bureaucracy should be reduced and this Executive Allowance should be abolished.

To another query about the import of coal from Afghanistan, Khawaja Asif said that Pakistani delegation returned from Kabul and import of coal would start from Afghanistan from next month for fulfilling requirements of power plants. He said the private sector such as cement plants were already importing coal from Afghanistan. There were arrangements required on our border side for placing infrastructure to import coal from Afghanistan.

To another query about accomplishing billions of dollar transactions from friendly countries, Khawaja Asif said that legislation would be ready for accomplishing government to government (G2G) transactions as two RLNG power plants would be sold out to one friendly country.

The official sources said that Pakistan would have to fulfil external financing gap of $4 billion as prior action of the IMF before signing the Letter of Intent (LOI) and forwarding formal request to the IMF’s Executive Board for approving 7th and 8th reviews and release of $1.17 billion instalment. So, Islamabad is required to manage $4 billion gap maximum by the first week of August 2022.

To another query about the severe impact on middle class owing to tough decisions taken by the government to avert default, Khawaja Asif admitted that the middle class was bearing the cost of hiking prices of POL and other steps fuelling inflationary pressures.

It is an international phenomenon as inflation has made lives of people living in the US and the UK miserable, he said. “There are losses of public sector, so there is a need to squeeze the public sector as much as possible,” he added.

Khawaja Asif said that it was the proof of free and fair elections held on 20 seats in Punjab that the PMLN protected sanctity and respect of votes by adhering to its slogan. He did not offer his comment when asked whether the PMLN would accept Pervez Elahi as Chief Minister Punjab if the House elected him after showing majority. He said the PDM coalition government sacrificed its political capital but did not compromise on the country’s economic interest and took all difficult but unpopular steps to avert the looming default.