(MENAFN- Khaleej Times) Pakistan's currency is set to stabilise after falling to a record low as a $6.6 billion loan from the International Monetary Fund spurs capital inflows, Finance Minister Ishaq Dar said in an interview.
"Reserves are growing," Dar said after Prime Minister Nawaz Sharif met company executives in New York. "We don't intervene in our currency. It is a free market."
The Pakistani rupee has been among Asia's worst performers this year, according to data compiled by Bloomberg, and has fallen 1.4 per cent over the past month even as the IMF approved a loan to avoid a balance-of-payments crisis. The currency touched 106.3 on September 18, the weakest level in data going back to 1988, and has dropped 7.8 per cent this year.
Sharif's three-month-old government is struggling to revive the $231 billion economy crippled by chronic energy shortages and security issues. He has announced an ambitious reform programme that includes increasing tax revenue and privatising loss-making state-owned companies.
Net capital inflows are set to bolster foreign reserves as the government meets the loan's conditions, Dar said. Foreign reserves fell by more than half to $4.9 billion in September from a year earlier, enough to cover about 1.5 months of imports, central bank data shows.
The rupee surged 1.6 per cent on Thursday, the biggest gain since December 17, 2008, after reports that the central bank sold up to $60 million to support the currency, the Dawn newspaper reported on Friday, citing bankers it didn't identify. The rupee fell 0.4 per cent to 105.8 to the US dollar in mid-morning Karachi trading, according to data compiled by Bloomberg.
Sharif has been able to cut power blackouts by paying off more than $4 billion in energy debt to electricity producers.
"There are 30 companies which we have targeted for either full privatisations or strategic partnerships," Dar said, adding that the list may include electricity generators. The deals may take about nine months to close, he said.
Sharif is targeting a 4.4 per cent economic growth during the fiscal year, up from an estimated 3.6 per cent in 2012-13, and to keep inflation in single digits.
The government can meet its goals to cut the the deficit by 50 per cent in three years, Dar said, adding that it aims to achieve annual economic growth of six per cent within five years.
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