Pakistan’s finance minister rules out further devaluation of rupee

KARACHI: Pakistan’s Finance minister, Asad Umar, on Friday ruled out any further devaluation of Pak Rupee citing the country’s central bank as saying that rupee was at “equilibrium” and that there seemed no reason for another dip against the greenback.
“Today, the State Bank of Pakistan (SBP) has given categorical statement that rupee is at equilibrium. The State Bank of Pakistan can’t talk in clearer words than this. There is no reason for devaluation,” said the minister addressing the audience via video link at the gong ceremony held at Pakistan Stock Exchange (PSX) for Interloop — manufacturer of socks for brands like Nike, Adidas, and Puma. 
As Pakistan negotiates with the IMF for a bailout program, rumors of further devaluation of Pak Rupee keep resonating in the currency and stock markets.
Umar dissed such speculations and clarified that “there is no demand in talks with the IMF as to what should be the exchange rate.”
“The matter is simple”, he said “Pakistan has traditionally kept its rupee overvalued, Pakistan’s economy has suffered losses due to this. The Real Effective Exchange Rate (REER) in January 2018 was Rs127.”
He advised the general public not to heed the rumors, urging them to buy shares as the market was at attractive levels. “There is no need to waste your money buying dollars,” he said.
Finance minister’s statement has come at a time when the rupee has depreciated by 1.8 percent to PKR 141.39 against US dollar in the last four weeks in the interbank market. The rupee was trading at PKR 140.40 on Friday in the interbank market.
Country’s financial experts forecast that the rupee would hit PKR 150 level by the end of the year 2019 and PKR 145-146 level by June this year.
The upcoming budget would introduce measures which would help in projecting Pakistan’s capital market to historical highs, Umar said adding that “government has taken tough decisions to make Pakistan a part of the world economy.”
He further called for steps to move at par with the global economy. “We have to walk in tandem with the world because in isolation we can’t survive. Our regulators will have to be more practical,” added Umar. 
He noted that Pakistan is an economy of $300-350 billion as compared to $70 trillion world economy. “The economic miracle of Asia is export driven so we need to increase exports”, he said.
“The government has taken various difficult decisions in the larger interest of the country. We want to work according to the system worldwide and change should be introduced stage-wise.”
He lauded Interloop Limited for raising PKR 5.02 billion at the PSX last month, which is being described as the largest Initial Public Offering (IPO) in the private sector in the history of country’s capital market.
The supplier of socks to the world’s leading brands shares was oversubscribed by 1.8 times against demand of PKR 8 billion and the company’s target of PKR 4.9 billion.