ISHAQ Dar’s clarification that the government doesn’t plan to seize foreign currency stocks held with the commercial banks should put paid to widespread speculations that he ever intended to ‘freeze’ private citizens’ dollar accounts as he had done in the wake of US sanctions following Pakistan’s nuclear tests in 1998. The finance minister’s remarks came days after his statement that Pakistan’s foreign exchange reserves stood at $10bn — a much higher number than the central bank’s reserves of $4.5bn — as ‘dollars held by the banks also belonged to the country’. That had fuelled rumours that the declining SBP forex reserves may force the government to confiscate private foreign currency accounts to avert a default. He assured the public that nothing of the sort would happen. Elaborating, he rightly said it was a practice to include in the national foreign exchange reserves the foreign exchange held both with the central banks and the commercial banks, and give a breakdown.

Speaking at a press conference alongside the prime minister, Mr Dar said his statement was ‘twisted by those who had destroyed the country’s economy in the last four years’. There is every possibility of the opposition giving his remarks a spin that would undermine the government. But the nation’s growing dollar crunch and disappearance of foreign currency from the market has led many to empty their accounts in the recent weeks. That the minister’s irresponsible statement was enough to fuel panic even without the opposition twisting his words cannot be ignored, especially considering his track record. The freezing of the private foreign currency accounts during his first tenure as finance minister was a blunder that left public confidence severely shaken. Even if he doesn’t plan to freeze private dollar accounts, Mr Dar’s obsession with a strong rupee and management of the exchange rate at the cost of the country’s IMF programme is exacting a steep price. When he said at the presser that the next tranche from the IMF has been delayed due to the differences over revenue collection, it was but a half-truth. His management of the foreign exchange market that has created a wide gap between the interbank and open market dollar rates is an even bigger issue. It is time Mr Dar learnt to unlearn what he has believed until now. And he should stop making irresponsible public statements.

Published in Dawn, January 12th, 2023