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Pakistan swaps 6 finance ministers in 4 years to stem crisis

Pakistan swaps 6 finance ministers in 4 years to stem crisis


ISLAMABAD: Pakistan appointed Ishaq Dar as finance minister to pull the country out of an economic crisis worsened by a fast falling currency and high inflation.
Dar, the sixth finance chief since August 2018, takes office after the South Asian nation made an urgent appeal for debt relief from rich nations as catastrophic floods exacerbated by climate change hit the already fragile economy.
Pakistan secured a $1.1 billion loan from the International Monetary Fund in August to avert an imminent default, but the deadly flooding took away lives and livelihood, and led to damages of around $30 billion.
Dar, an accountant by profession, will be helming the office for the fourth time and replaces Miftah Ismail. He will be tasked with reversing the course of the nation’s current economic predicament amid challenges such as low growth, high inflation and foreign-exchange reserves standing below the standard benchmark of three months of imports. The South Asian country is also scheduled to repay a $1 billion sovereign bond in December.
Pakistan gross domestic product is estimated to halve from 5% in the fiscal year ending June following the floods. Its central bank has also raised rates by 525 basis points so far this year to tame prices that have risen for six straight months and hit a 47-year high of 27.3% in August.
“My aim will be to break contraction in the economy and change its direction,” Dar said on Monday before assuming office.
His appointment is stoking hopes of a reversal in the currency that is among the worst performers against the US dollar globally this month. During his last stint as finance chief, Dar managed to keep the rupee as the most stable currency in Asia between 2014 to 2017, according to data compiled by Bloomberg. The rupee has gained 3.4% since he was nominated for the post.
Dar has repeatedly said the currency is under-valued and speculators won’t be allowed to determine its value against the US dollar.
Dar, a close aide of former Prime Minister Nawaz Sharif, will also face a tough political environment to adhere to some of the key IMF prescriptions amid calls for fresh elections and rising public anger due to the floods as well as the reversal of energy subsidies that increased prices.


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