ISLAMABAD - The International Monetary Fund has categorically rejected its involvement in depreciation of rupee, which touched its historic low level against US dollar last week.
“IMF’s Executive Board approved a three-year, $6.64 billion extended Fund facility arrangement with Pakistan earlier this month. We are aware that there has been some depreciation of the rupee in recent days. This is not a requirement of the IMF agreement; quite the contrary. Policies under the agreement will help reverse the economic imbalances that are causing exchange rate pressure”, said Gerry Rice, Director, Communications Department, International Monetary Fund in Washington when he was asked to comment on massive local currency devaluation is the result of the recent programme with the Fund.
However, the economic experts believed that IMF has not mentioned rupee deprecation in loan agreement but the actions it demanded has enhanced the dollar value against the rupee. When contacted, renowned economist Dr Ashfaque Hassan Khan last week said that IMF’s directions, like State Bank of Pakistan (SBP) to purchase $125 million from the inter-bank market, has resulted in rupee depreciation against US dollar. He further said that invariably, exchange rate depreciation has been an essential part of the conventional macroeconomic policies advocated by the IMF. Dr Khan said that rupee deprecation is not mentioned in the agreement but the directions have resulted in losing rupee value.
Similarly, Saqib Sherani, former advisor to finance ministry, has said that there are several reasons behind soaring dollar value against rupee including IMF’s condition to central bank’s buying dollar from interbank. He said other reasons included speculations, and pressure of repayment to the IMF.
It is worth mentioning here that US dollar has broken all previous records, as its value reached above 110 rupees last week. While the dollar touched Rs110.50 in the inter-bank, the currency was priced at Rs111.50 in the open market, which forced to the State Bank of Pakistan to intervene, that helped and rupee reached Rs105.50 in the inter-bank market on Thursday.