Ishaq Dar Thinks No Plans Required to Support Rupee, ‘Promises’ to Resolve Debt Crisis

The Government of Pakistan currently has no plans to support the rupee and expects traders to trust the coalition for sorting things out, reported Bloomberg.

Finance Minister Ishaq Dar said in an interview last week that no specific actions are required to support the country’s currency at this time as traders gain confidence that the new administration will address the country’s financial issues.

Dar said the rupee has been “heavily undervalued. It is because of speculation, and some market participants are to blame”.

Pakistan’s finance frontman thanked market participants for realizing that that game at the expense of the national currency won’t continue, noting that the exchange rate stabilized after traders learned of his appointment. “I fix these things,” he claimed.

When asked if specific measures were required to strengthen the rupee, he replied, “I don’t think so. We don’t have the luxury of physically spending foreign exchange right now because it’s very scarce”.

Dar remains confident that the country’s economy will grow faster than the central bank’s forecast of around 2 percent. “Maybe over 3 — I don’t want to be giving a big hope, but I’m fairly confident,” he commented.

The South Asian nation’s dollar-denominated bonds have been falling to maddening yields since Moody’s downgraded Pakistan’s credit rating almost two weeks ago. Dar says there’s no plan to engage bondholders in order to extend the maturity date of Pakistan’s $1 billion global bond, which is due in December. There are certain proposals,” he said, including issuing a “replacement paper,” but the approach is to look at optional rather than mandatory measures.

He rounded off the interview with another promise to tackle the nation’s out-of-control debt profile during the fiscal year 2022-23, with almost $22 billion already due in the next 12 months.

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