Ending depreciation: Ishaq Dar vows to arrest rupee’s free fall

Finance minister urges business community to exploit GSP Plus status to the fullest.

LAHORE:

Finance Minister Ishaq Dar vowed on Saturday to put an end to the depreciation of the rupee against the dollar.

“[Entrepreneurs] should cash their dollars immediately,” he said while speaking at an event organised by the All Pakistan Textile Mills Association (APTMA) at the Governor House in Lahore. “I guarantee that the rupee will start gaining value from now onwards.”

The finance minister, however, rejected earlier media reports which quoted him as promising that he would bring the rupee-dollar parity back to the 1998-1999 levels.

“While speaking at a talk show, I said the rebound in the rupee value will be the same as the one witnessed in 1998-1999, when the rupee rebounded from Rs67 against the dollar to Rs54 in a short duration,” he clarified.

“I, however, never mentioned any specific value at which the dollar will be available… I can only ensure that the rupee doesn’t decline from now on,” he added.

The event held at the Governor House was organised to celebrate the grant of the GSP Plus status to Pakistan by the European Union. EU envoys and members of the European Parliament were also in attendance.

Talking about the GSP Plus status, the finance minister hoped that the Pakistani business community would take full advantage of the opportunities it would provide. He said the government was also striving for a better access to the US market.

Dar said the government would facilitate the textile industry in particular by providing a regular supply of electricity. “Punjab’s industry will be provided gas two days a week, even though it will mean curtailing its supply to the power sector,” he added. “Running industry is more important.”

The finance minister said that the government was considering proposals to operate gas-powered plants for the textile industry on alternate fuels. “We want you [textile manufacturers] to run your factories 24/7 and ensure the highest production possible,” he added.

Dar conceded the country’s economy was in a bad shape at the moment. “We have to carry the baggage we inherited [from the previous government],” he said. However, he said things were starting to improve. “Against a GDP growth target of 2.9%, the country posted a growth rate of 5% in the first quarter of this fiscal year.”

“If this momentum is sustained for the next three quarters, we will achieve our growth targets for the next three years in half that time,” the minister added. He said all global rating agencies have upgraded Pakistan’s ratings and foreign investors were now eyeing the Pakistani market.

“The present regime went ahead with the programme to produce power from coal despite the reservations expressed by the US and some European countries,” he said. Pakistan lost few votes in the EU Parliament on GSP Plus status because certain member states had reservations about the country’s coal power projects.

“We need cheap energy immediately and coal energy projects can be installed in the shortest possible time,” Dar said. “For long term, we are going for environment-friendly sources, such as hydroelectric and nuclear power plants” he added. We’ll overcome the power crisis in the next four years.”

Dar said the present government had taken some unpopular decisions, but it was pursuing policies which were in line with Pakistan’s national interest. “This may cost us some of our popularity but we want to leave a legacy that ensures sustained growth in Pakistan.”

Talking about Pakistan’s dwindling foreign exchange reserves, Dar assured members of the business community that the situation would begin to improve from January. “A lot of investment and aid is in the pipeline, and will help boost our reserves to a comfortable level.”

Published in The Express Tribune, December 15^th, 2013.