In his first public appearance following his trip to Washington, Dar also disclaimed any intention of turning to the International Monetary Fund for assistance or “pleading” with other nations to send aid to flood victims. But he gave the markets his word that they shouldn’t panic and that the foreign exchange reserves will shortly increase.
Following the All Pakistan Chartered Accountants Conference 2022, Dar told the media, “The government has been actively pursuing the policy of purchasing cheaper oil from Russia, and I have sounded the Americans about our decision during a meeting with the US officials.” The Institute of Chartered Accounts of Pakistan organized the conference.
Throughout a meeting with Donald Lu, Assistant Secretary for the South and Central Asia Bureau of the State Department, and Ramin Toloui, Undersecretary for the Bureau of Economic and Business Affairs, the minister told the US about Pakistan’s stance.
Although the 2% decrease in crude oil output could push up oil prices, hurting Pakistan’s fragile external sector situation, the announcement is in keeping with Pakistan’s outspoken support for Saudi Arabia’s plan to reduce oil production.
According to the finance minister, Pakistan could gain from purchasing Russian oil if India did. Dar declared, “We won’t ink a deal with terms that are worse than India.
India has replaced China as Moscow’s top oil consumer, and China is now purchasing Russian oil at a considerable discount.
Dar added that Pakistan had no intention of seeking assistance from the IMF during his recent visit to Washington.
He said, alluding to the removal of Miftah Ismail, “The sovereign commitments must be honored and there should not be a change of plan with the change of guard.” By June of the following year, he stated, Pakistan would have finished the IMF programm.
Dar made his statement as international lenders pushed Pakistan to carry out the reform plan negotiated with the IMF and the World Bank and also to maintain the flexibility of the currency regime.
The minister insisted once more that the rupee was still undervalued and that it will soon rebound to below Rs 200 per dollar, which is what the inflation-adjusted calculation refers to as “its real value.” The minister claimed that some banks resumed manipulating the rupee, giving up their constructive role in assisting the currency to recoup its lost value.
I can guarantee you that we have a sufficient amount of foreign exchange reserves, and they won’t cause any issues for the nation, he said.
“I want to give a message to the markets that there is no need to get nervous, we are back in business and we will arrange everything. Nothing is to worry as Pakistan will not default,” said stated. “Things will improve.”
The minister claimed that a decline in foreign exchange reserves had caused fear in the markets, but he also noted that there was no need for concern because the nation had already moved past the point when there was any chance of default.
“Pakistan’s funding needs for the ongoing fiscal year stand at $32 billion to $34 billion, which can be achieved as we did in FY2016-17,” he claimed.
The finance minister claimed to have discussed a strategy for securing the necessary funds with Prime Minister Shehbaz Sharif.
The minister also reaffirmed the $32.4 billion original estimate of the flood damages made in the World Bank-led Post Damage and Need Assessment study. Last Monday, The Express Tribune predicted that the total cost will likely exceed $32 billion, including $19 billion in economic damages.
The minister reaffirmed that Pakistan would not request a loan reschedule from the Paris Club. “I told the prime minister that this would not be the right thing, as it would not send a good signal. We should be able to deal with our liabilities and responsibilities without going to the Paris Club,” he added.
Dar also denied rumors that Pakistan might request a postponement of the bond’s maturity date. Bonds worth $1 billion are due to mature in December, according to the finance minister.