Dollar demand to reduce next month due to falling imports: Miftah

ISLAMABAD, Jul 21 (APP): Federal Minister for Finance and Revenue Miftah Ismail Thursday said the pressure on Pak rupee would start receding from next month with persistent decrease in imports.

Addressing a press conference here along with Defence Minister Khawaja Muhammad Asif, Miftah Ismail said the domestic financial markets were jolted after the Punjab Assembly bye-elections on July 17 but the situation was now under control as the coalition government had resolved to complete its tenure.

The current month’s imports were less as compared to the last month and the same month of previous year, he added.

The minister observed that the fresh pressure on the rupee against dollar was mainly due to the political turmoil as the people felt that the federal government might not stand, but when the latter made it clear that it would complete its tenure, the negative sentiments subsided immediately.

“The other issue is that last month the country’s import bill of $7.5 billion was historically high, $3.7 billion of them related to the energy sector and the rest $3.7 billion was of other goods. The pressure on the rupee is now mounting due to payments of these imports,” he added.

He said the State Bank of Pakistan (SBP) took multiple measures due to which very few letters of credit (L/Cs) were opened. “In the current month, imports will fall and further reduce in next month.”

Miftah Ismail explained that the country had a storage of over two billion liters of diesel, which was enough for next 60 days. So we do not need to import it for at least one month,” he said, adding the government had also sufficient stock of furnace oil enough for next two to three months.

Further, he added, the motor gasoline demand had also reduced after increase in the prices of petroleum products because when petrol was cheaper, the people were hoarding in anticipation of rise in its price.

The impact of all the above factors would be witnessed next month, with significant decline in the demand of dollar in the banks, the minister remarked.

As regards the rumours about the economy, Miftah said it was going in the right direction and dispelled the impression of default.

Replying to a question, the minister said the coalition government had no regret of taking tough economic decisions because it had risked the party’s political gains only to save the country from falling into default.

The voters would hopefully support the government’s actions in the next election, he added.