Former Finance Minister Miftah Ismail has cautioned that the Pakistani rupee may face another steep devaluation if current administrative measures to artificially stabilize the exchange rate continue.
In a post on X, he noted that past attempts to hold the dollar at fixed levels, such as Rs. 60 in 2007/08, Rs. 105 in 2016/17, and Rs. 230 in 2022, all ended in sharp corrections once reserves were depleted, pushing the dollar to much higher levels.
“Right now the State Bank is compelling commercial banks to sell dollars at Rs. 282–283, incurring a loss of about Rs. 7 per dollar. But this scheme too will fail, and the rupee will devalue again,” he warned.
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Citing historical trends, he observed that the rupee has lost 7–8 percent of its value annually over the last four decades. He stressed that instead of administrative interventions, policymakers should focus on reducing inflation, cutting the budget deficit, raising productivity and exports, curbing government spending, and limiting money printing.
“These are the real measures that can help keep the rupee strong, because in the end, the market always wins,” he added.
He noted that past attempts to hold the dollar at fixed levels — such as Rs 60 in 2007/08, Rs 105 in 2016/17, and Rs 230 in 2022 — all ended in sharp corrections once reserves were depleted, pushing the dollar to much higher levels.
“Right now the State Bank is compelling commercial banks to sell dollars at Rs 282–283, incurring a loss of about Rs 7 per dollar. But this scheme too will fail, and the rupee will devalue again,” he warned.
Citing historical trends, he observed that the rupee has lost 7–8% of its value annually over the last four decades. He stressed that instead of administrative interventions, policymakers should focus on reducing inflation, cutting the budget deficit, raising productivity and exports, curbing government spending, and limiting money printing.
“These are the real measures that can help keep the rupee strong, because in the end, the market always wins,” he added.
