ISLAMABAD: The government has decided to launch a “full-fledged” operation against the hoarding of US dollars and speculative currency trade in the country, Information Minister Fawad Chaudhry announced on Friday.
He said the government has directed the Federal Investigation Agency (FIA) to launch the operation in coordination with the State Bank of Pakistan and the Ministry of Finance.
The announcement came hours after Finance Minister Asad Umar ruled out a further devaluation of the rupee, which has lost about 25 per cent of its value over the past year, urging people to invest in the stock market and not waste money buying dollars.
Talking to a group of journalists in Islamabad, the minister said that speculations in the local money market had sparked an increase in the dollar-rupee exchange rate and the situation had been worsened by the “fake news” circulating on social media.
Umar said there would be no further devaluation of the rupee as the SBP had categorically made it clear that the supply and demand of dollar against the rupee had reached its equilibrium level.
He reiterated that the International Monetary Fund (IMF) had made no demands to set the exchange rate or to devalue the rupee.
A currency should be aligned with its fundamentals, he said, adding that the real effective exchange rate (REER) in January 2018 was Rs127 against the US dollar, which were 27 per cent overvalued at the time.
He stressed the need for stopping the speculations for the stabilization of local currency.
According to Umar, the recent statements made by former finance minister Ishaq Dar on TV also contributed to the speculations about the value of the dollar.
He asked all such speculators to stop spreading the rumours, warning that the government otherwise had the option of taking them to the court and dealing with them according to the law.
Umar said the PTI government had inherited a fragile economy with rising fiscal and current account deficits and declining foreign direct investment.
He recalled that before their government took office, by July 25, 2018, the value of rupee against the dollar had reached Rs127 from Rs105 in December 2017, witnessing a devaluation of Rs22 at the time.
The minister admitted that there was a rise in inflation but insisted that it was still at a lower level when compared with the first eight months of the governments of the PPP and PML-N.