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Pakistan finance minister sees rupee strengthening vs U.S. dollar

10/03/2022 | 12:54pm EST
FILE PHOTO: A trader counts Pakistani rupee notes at a currency exchange booth in Peshawar

KARACHI, Pakistan (Reuters) -Pakistan's newly appointed finance minister said on Monday that the country's currency will strengthen to under 200 rupees to the U.S. dollar.

The rupee is currently at around 227 to the U.S. dollar, and the currency has been in turmoil, falling as much as 30% this year.

"The rupee's real value is below 200 (to $1), and, God willing, it will come below 200 (rupees)," Minister Ishaq Dar said in an interview with local television channel Geo News.

He added that the rupee would be strengthened though government "policies" as the current rate was inflated due to speculation.

Dar, who was sworn in last week as finance minister for his fourth stint in the role, has strongly favoured intervention in currency markets in the past.

Since Dar took over, the rupee has strengthened. According to central bank figures, Pakistan currently has just $8 billion in reserves, barely covering a month of imports, making market intervention through currency injections difficult.

The country was only recently able to restart an International Monetary Fund (IMF) bailout package after agreeing to undertake difficult reforms.

One of the agreements was to implement a market-determined exchange rate and to stop government intervention in the central bank.

Dar also defended his decision to slash fuel prices days after taking over - reversing a policy of raising prices monthly through added levies to ensure enhanced revenues as agreed with the IMF.

Dar said imposing additional levies was not justified as the country struggled with catastrophic floods that have killed more than 1,600 people and inflicted at least $30 billion in damages.

"I have been dealing with the IMF for the last 25 years; I will deal with it," he said, referring to any potential reservations by the lender.

(Reporting by Syed Raza Hassan in KarachiWriting by Gibran PeshimamEditing by Jane Merriman and Matthew Lewis)

By Syed Raza Hassan


ę Reuters 2022
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