Ishaq Dar says spike in dollar rate artificial

ISLAMABAD: Finance Minister Senator Mohammad Ishaq Dar on Thursday said that the spike in dollar rate was artificial and a result of some communication gap between certain stakeholders.

“The matter would be thoroughly investigated and those responsible would be brought to book,” the minister remarked while talking to media after holding meeting with chief executives/presidents of commercial banks over the situation arising from the hike in US dollar rate on July 05, 2017.

In his meeting with the bankers, the finance minister recounted the improvements in the economy and stated that foreign exchange stability had contributed to the overall economic stability achieved during the last four years.

He said that the government was committed to consolidate the gains and would not let anyone erode the hard earned stability for short term gains.

He added that government did not believe in any artificial tactics to impact the currency market. It always believed that market forces must be allowed to work and determine the value of currency. But at the same time it was obligation of the government to exercise vigilance, he said.

Dar said that banking sector had a key role in economic development. He said that Pakistan has achieved 5.28% growth and looks to increase it to 6% during 2017-18. All international institutions admitted the economic turnaround achieved by Pakistan.

“Currently State Bank of Pakistan has over $16 billion in its reserves and another $5 billion were held by commercial banks,” he said.

He said that this was in sharp contrast to the situation in 2013 and early 2014 when SBP reserves were hardly enough for a few weeks of imports. He said that the sudden hike in the price of the dollar on 5th July was shocking and it initially seemed that it was the result of current political situation, however it had become clear overnight that it was caused due to a communication gap.

Ishaq Dar said that the matter would be thoroughly investigated. In a stable economic situation, any untoward change in the dollar rate was not comprehensible, the minister said.

The minister on the occasion lauded the cooperation offered by senior officials of different banks in resolving the situation arising out of artificial spike in dollar rate.

The Senior Bankers assured the minister of their complete support on all economic issues and said that economic stability was also important for the banking industry.

They expressed the confidence that the artificial hike created the day before would reverse in due course of time. The Bankers also apprised the Finance Minister of certain issues facing the Banking sector and made proposal to resolve them.

The finance minister directed the finance secretary and chairman FBR to take immediate action to resolve the issues.

Secretary and senior officials of the Ministry of Finance, chairman FBR and deputy governor (banking) of SBP were also present during the meeting.