ISLAMABAD – Former finance minister Asad Umar, while responding to thematter of sudden devaluation of rupee against the US dollar, said onThursday that the issue would be raised in the meeting of the NationalAssembly’s Standing Committee on Finance and Economic Affairs.
He spoke to the media, and disclosed that until he was the financeminister, no such condition was placed forward by the InternationalMonetary Fund (IMF) [that would have resulted in currency devaluation].
He believed that the matter was not interlinked with the agreement betweenPakistan and the IMF [for a bailout package].
Besides, the former finance minister is also expected to explain thedifference between the terms and conditions he had negotiated with theglobal money lender and those accepted by the new economic team of thegovernment once those terms and conditions are made public.
Pakistan’s rupee weakened to a record in an apparent devaluation, four daysafter the country secured a bailout from the IMF that investors speculateincludes tough conditions to reform the economy.
The rupee dropped as much as 3.4% on Thursday, the most in more than fivemonths. The currency has plunged more than 20 percent in the past year,making it the worst performer in a basket of 13 currencies in Asia.
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“A market-determined exchange rate’’ will help the economy, themultilateral lender said in a statement on May 12.
The nation’s central bank had devalued the currency five times last yearand raised interest rates by 475 basis points as it sought to contain thefinancial blowouts from Pakistan’s twin current-account and budget deficits.
The rupee devaluation is “an IMF condition and they seem serious about it,”said Asad Sayeed, a director at the Karachi-based consultancy Collectivefor Social Science Research. “It’s an open market policy. It appears theyhave decided to adopt it.”
Pakistan’s central bank spokesman Abid Qamar did not respond to a requestfor a comment. The nation had previously said the IMF had not sought to seta level for the currency.
