A decision error to pay import bills unnecessarily on the advice of an alliance partner has depleted the country’s foreign exchange reserves. A source in the ruling Muslim League (N) claims that despite the approval of the IMF loan, the move led to a sharp depreciation of the rupee in September.
However, sources close to Miftah Ismail believe that the payment of the import bill was not the reason for the depreciation of the rupee. Sources believe that credit default risk perception, devastating floods and the Afghan factor were the major reasons that led to the depreciation of the rupee.
Sources close to incoming Finance Minister Ishaq Dar claim that he has done his homework on tackling devaluation. Sources further claimed that within the first three months, he would bring the rupee’s value to Rs 200 against the US dollar.
Dar has devised a strategy to bring down electricity rates to provide relief to consumers. Sources further claim that Dar understands the magnitude of the economic challenges but has done his homework and people will see the impact after he takes charge.
Asked what Ishaq Dar will do differently that his predecessor Miftah Ismail failed to do, sources claim that Dar has plans to reduce electricity rates, reactivate National Pricing Committees to curb inflation and There is a plan to ensure strict foreign exchange policy. market.
According to sources, Pakistan’s export industry is dependent on imported goods (65 percent) which forms a major part of the import bill. Export policy needs to be revised. Dar will focus on targeted subsidies to the export sector if needed. In the past, DAR had pledged to provide targeted subsidies to the export sector and in this regard they have fulfilled their promise.
DAR will focus on reducing power prices and controlling inflation. In response to a question about the massive depreciation of the rupee even after the loan from the IMF, a source close to Ishaq Dar said that the government’s decision-making error in import bill payments was due to the Rs. Competition is the main reason for the depreciation of the dollar.
Sources close to Miftah Ismail told The News that electricity rates are bound to come down from October onwards. He said that the increase in electricity rates is long-standing. Imran’s government wanted to increase electricity prices but was reluctant to take this unpopular decision. Eventually the coalition government had to increase the tariff.
