Pakistan Muslim League-Nawaz (PML-N) leader and Senator Ishaq Dar on Monday called on stakeholders to come onboard to resolve the exchange rate issue as he emphasised that Pakistan’s currency is still undervalued.

Speaking to the Senate session, the former finance minister – widely seen as an advocate of a strong rupee – said devaluation does not support Pakistan’s exports, unlike the way it does in China, because its foreign shipments are highly dependent on imports.

He reiterated that devaluation is the “mother of all evils” while supporting the recent strict measures by the interim government.

“Around 91% of the economy is destroyed due to rupee devaluation,” he said, reiterating his firm stance that Pakistan’s rupee is stronger than its value.

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“Pakistan’s currency remained stable in the PML-N led government back in 2013,” Dar said, refuting allegations of intervention in the State Bank of Pakistan (SBP) to control the rupee.

Intervention in the SBP was more during the Pakistan Tehreek-e-Insaf (PTI) government from 2018 to 2022 before the end of the government, he claimed.

“Exports increased by $800 million in the first three years of PTI, but it added $20 billion to the country’s loans,” Dar said. “When we left the government in 2018, debt was $70 billion and when PTI government was removed, debt was $100 billion.

“I firmly believe that Real Effective Exchange Rate (REER) is the way to see the rupee value. Its a scientific method.”

The former finance minister said that the central bank does intervene to support the rupee but to a certain level and as per its capacity.

“The SBP doesn’t have that much money that it could intervene like the Bank of England or Bank of Japan.

“In the PTI-led government, intervention made by the SBP were around of $7-8 billion, while in the previous PML-N led government (2013-2018) SBP injected $5-5.5 billion to stabilise the rupee,” Dar said.

Regarding the 16-month Pakistan Democratic Movement (PDM) government, Dar claimed that some international forces were up in their arms using the international financial institutions (IFIs) to ensure Pakistan defaulted.

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He also supported the current caretaker government’s strict measures against currency dealers, saying it was “Ishaq Dar’s formula”.

“The B and C categories have been removed and the A category of exchange companies is working and that too under strict monitoring, which is good and we all should support this,” Dar said.

The former finance minister reiterated that the government should negotiate with the international institutions and convince them about the REER.