Dollar spike result of miscommunication, clarifies Dar

ISLAMABAD: Finance Minister Ishaq Dar has attributed the sudden spike in US dollar to “miscommunication between certain people” and assured that the market would adjust itself back to stability.

Addressing media after chairing a meeting of bank CEOs to discuss the recent development, Dar said the surge in the dollar’s value was “surprising” and “artificial”.

“The hike in the dollar was artificial and happened as a result of miscommunication between certain people. A transparent investigation into the matter would be conducted and we will gather all the facts, including who profited and who bore losses from this hike,” he asserted.

Dar said a permanent Governor of the State Bank of Pakistan would be appointed once Prime Minister Nawaz Sharif returns from his official visit to Tajikistan.

“The inquiry into the dollar hike would be carried out after the governor is appointed,” he remarked.

Dar said that no person, including himself, has any authority to artificially adjust the dollar’s value.

“The market will adjust and stabilise on its own,” he said, adding that he has faith in the open market.

Dollar slides to Rs105.50

The US dollar depreciated to Rs105.50 on Thursday afternoon after spiking to over Rs108 the previous day.

The dollar was being sold for Rs107 in the open market earlier today, said Malik Bostan, president at Forex Association of Pakistan.

The rupee to dollar exchange rate depreciated by 3.1 percent from Rs104.9 on Tuesday to Rs108.25 on Wednesday, as the dollar surged to its 2.5-year-high against the rupee in the interbank market. The surge sparked concerns across the market, with Dar taking notice of the hike.

According to a statement by the finance division, released in the aftermath of the hike, the finance minister “expressed deep concern, indignation, and disappointment at the fact that the current political situation is being exploited by certain individuals, banks and entities, resulting in the artificial rise of the interbank rate of the US Dollar versus the Pakistani Rupee.”

The spike negatively affected the country’s Foreign Exchange (FX) markets, stated the press release.

According to sources, foreign investment outflows from the Pakistan Stock Exchange resulted in the surge.