ISLAMABAD   -    The government has directed Federal Investigation Agency (FIA) to launch a full-fledged operation against dollar hoarding and speculative currency trade. The government said that there was no reason now to further devalue the rupee as the currency had reached at its absolute equilibrium level.

The federal government believes that dollar value is increasing only due to the speculations and false news being spread on the social media. “The government has directed FIA to launch a full-fledged operation against dollar hoarding, and speculative currency trade. The action is being launched in coordination with State Bank and Ministry of Finance,” said Minister for Information and Broadcasting Chaudhry Fawad Hussain in a tweet.

Earlier, Finance Minister Asad Umar also warned the speculators to stop spreading such rumours otherwise the government had the option of taking them to the court and deal with them according to the law.

He informed the media that there would be no further devaluation in rupee value as the dollar value is increasing due to speculations and false news. He said State Bank of Pakistan had already clarified that the supply and demand of dollar against rupee had reached to its equilibrium level.

He said in the past the rupee had been kept overvalued artificially which badly affected the country’s economy. A currency should be aligned with the fundamentals, he said adding the real effective exchange rate in January 2018 was Rs 127 against dollar, however the rupee regrettably kept overvalued.

“Please don’t mislead the people by spreading rumours over the future of currency value,” he maintained. “There is no reason for big devaluations.”

He also dismissed the impression that dollar is increasing on the demand of International Monetary Fund. “The IMF had never demanded any rate for dollar. They are asking us for mechanism and to introduce free-float exchange rate regime,” he added.

Asad Umar asked the investors to invest in stock exchange or property instead of purchasing dollars as its value would increase in the months to come.

He also criticised the former finance minister Ishaq Dar who had asked the government to put him on a contract he would bring dollar back to Rs120. Dar also claimed that incumbent government had assured the IMF to take the dollar value to Rs169 by year 2020-21. Dar should face cases against him, as he was declared absconder by a court, which is not a good omen for the former finance minister of the country, Asad said.

The finance minister said that rupee was depreciated by Rs22 before the formation of the PTI government, as the dollar value surged to Rs127 in July 2018 (before general elections) from Rs105 in December 2017. However, the local currency was devalued by 14 percent during the so-far tenure of the incumbent government. The value of a dollar has gone to around Rs141 he said and added there is need for stopping these speculations for stabilisation of the local currency.

He admitted that inflation has increased but at lesser pace as compared to the initial months of PPP and PML-N governments. He said average inflation in first eight months of PML-N government increased from 8 percent to 10.9 percent whereas during first eight months of PTI government, average inflation increased from 6.9 percent to 9.4 percent which was lower as compared to the previous governments.

Asad said the government had controlled the soaring current account deficit and trade, which had swelled to $19 billion during the last fiscal year. The current account deficit had narrowed to $8.5 billion in eight months (July to February) of the ongoing fiscal year as against $11.4 billion in corresponding period of the previous year.

Trade deficit has declined to $21.5 billion during July to February period of the 2018-19 as compared to $24.2 billion in the same period last year.

About possible IMF bailout package, he said “My estimate is that in those meetings as we have come very close it is almost done, in principle. God willing, it will be close there, and after that we can sign an IMF agreement by inviting their staff mission.”

The minister admitted economy is pacing through slow phase. However, he said that when the government took measures for restructuring and straightening the fundamentals of the national economy, the economic slowdown occurred.

Despite some slowdown, many sectors of the national economy were showing positive growth including industrial sector of the country as cement production grew by 1.7 percent, urea production by 5.9 percent, sale of automobiles by 4 percent, and gas supply by 6 percent. He said consumption of petrol, gas and electricity has also increased.