Announces tax relief for shops consuming below 150 units
Finance Minister Miftah Ismail on Sunday voiced optimism that the pressure on the rupee, which has seen a sharp drop against the dollar in recent weeks, would ease within the next two weeks.
“You are correct that after the July 17 [Punjab by-] polls, the dollar has got out of control and appreciated,” he said while responding to a prompt from a reporter during a press conference in Islamabad.
“I truly believe — even though I don’t speculate on the currency market — but I think that the true value of the rupee is far greater than this.” He stated that this month and the previous month, the government had to make payments worth billions which had caused the local currency to come under pressure.
However, he added that the pressure on the rupee would end by next month, promising to rein in the current account deficit. The minister said that he would endeavour to ensure that the dollars coming into the country on a daily basis would be more than those leaving.
Ismail said that efforts to reduce imports would bear fruit and the value of the dollar would fall, adding that an improvement would be seen within the next two weeks.
“But let me be honest, no one knows the market. I can believe the fundamentals are in my favour but speculation, sentiments also play a role.” At one point, he also remarked that one remaining condition of the International Monetary Fund would be fulfilled by tomorrow morning. At the outset of his press conference, the minister highlighted that the country witnessed an import reduction of $2.7 billion between June and July. He said that for now the Economic Coordination Committee had given approval to lift the ban on imports, but the prime minister and the cabinet had yet to give their approval.
“We are removing the ban on most items, except for vehicles, mobile phones and home appliances.” He said that the ban on these three items would remain in place “for some time”.
Ismail said that the coalition government believes it has saved the country from defaulting. “We plan to give Pakistan a healthy economy. We are determined to minimise the current account deficit and turn it into surplus within a year or so.”
The minister said that the government had succeeded in curbing imports and would make efforts to increase exports over the next two to three months.
“But the big issue of impending default has been resolved.” During the press conference, the minister came down hard on the former PTI government and held them responsible for the country’s economic woes. He said that the coalition government was not capable of bringing the country to the brink in a mere three months.
“The ones who brought the country to this point was the PTI and Imran Khan.” He said that in 2018, Pakistan’s debt was approximately $25bn. “When we came into power, it had soared to $44.5bn. In four-and-a-half years, you increased our debt by $20bn,” he said, holding the party responsible for “four consecutive budget deficits”.
He blamed the policies of his predecessor, Shaukat Tarin, and the PTI chief for the burgeoning current account deficit. “In four years, the PTI could not reach the tax-GDP ratio of the PML-N government.
