Friday Mar 03, 2023
Former finance minister Miftah Ismail on Thursday slammed the policy of artificially managing the dollar rate, saying that it was "not a serious economic policy but a joke with the economy".
While commenting on the rupee’s sharp downfall on a Geo News programme, Ismail said that it was a bad day for Pakistan’s economy that the dollar had reached close to Rs300 and the interest rate had touched 20% after a massive 3% hike.
While indirectly criticising his successor Ishaq Dar, the Pakistan Muslim League-Nawaz (PML-N) leader lamented that holding the dollar artificially at 240 was not needed especially at a time when the government did not have funds.
“When you leave the dollar to the free market on the IMF’s condition, it jumps from 230 to 260. Then you decrease the price of petrol and in two days it [dollar] rises again by Rs30. This is not a serious economic policy but a joke with the economy,” said the former finance minister.
The PML-N leader further said that if the government wanted to hold the dollar rate at Rs180 artificially then it should have stopped it at Rs12.
“If you can set the rate on your own, then make it Rs10 or make one dollar equal to Rs1, this is all ridiculous,” said Miftah.
While recommending a prescription to the government, the Wharton economist said that the first thing that needs to be done is to secure the deal with IMF. He also added that there is a need to increase the average wage of workers so they can survive this inflation.
“The income of those whose salary is 100,000 must also be increased. Inflation will also increase but we have to do all this,” said Miftah.
Later while talking during Geo News programme “Aaj Shahzeb Khanzada Kay Saath”, the former finance minister warned that the default risk looming over Pakistan may not be over even if it secures the $1 billion tranche from the International Monetary Fund (IMF) as part of the $6.5 billion bailout.
Ismail said that whichever government comes to power after the elections will need to secure a fresh bailout from the Fund.
The former finance minister said the IMF's forecast of Pakistan’s current account deficit reaching $8 billion is "unfair". He also added that the friendly countries were angry with Pakistan as it does not do what it says.