KARACHI: Former finance minister Miftah Ismail has admitted that some commercial banks made hefty profits between May and July — when the US dollar was gaining value against the rupee, but was confident that the government’s plan to impose hefty fines on them will offset those profits.

Mr Ismail, whose candid remarks have been making headlines since he was replaced last month, appeared on a podcast where he claimed that the monetary help extended by Gulf countries comes on the back of “Pakistan Army’s strategic support” to those nations.

Commenting on the rupee’s value — which has gained 8.25 per cent after Mr Ismail was replaced by Ishaq Dar — the former finance minister categorically denied the perception that this was being done artificially.

Former finance minister claims army helped broker deals with US, Gulf countries

Talking to Shehzad Ghias Shaikh on ‘The Pakistan Experience’, he explained the government had no method to intervene in the market “by pumping dollars”.

He remarked that Mr Dar has been saying that the actual value of the dollar was around Rs200 and therefore, the exporters were thinking that its value will fall and they are selling it which strengthened the rupee.

However, he claimed around eight commercial banks made profit through speculation while assuring the SBP that they were making a loss

“The National Bank of Pakistan sold dollars to Pakistan State Oil at the rate of Rs242 the day when the market closed at Rs230,” he said, while explaining the role of the banks in currency speculation.

Army’s role in politics

Mr Ismail also claimed that Army Chief Qamar Javed Bajwa called US Deputy Secretary of State Wendy Sherman to facilitate the IMF deal. However, he added that many economic deals in the past were also brokered with the army’s help.

The deal with Qatar during the Imran Khan-led government to buy LNG at 10.4per cent of Brent was brokered by General Bajwa, he claimed.

“The fact of the matter is that [the] army has a lot of ingress in Pakistan politics. There is no debate about it,” he said, adding that Pakistan was one of the countries where the army has a huge role in politics.

“The money [Pakistan] gets from the UAE, Saudi Arabia and Qatar doesn’t come without the army’s support,” he said.

He also criticised PTI Chairman Imran Khan’s crusade against corruption adding that many countries are more corrupt than Pakistan but yet they were progressing.

“NAB has been there for so long. Since NAB [was established] corruption has increased or decreased? There are also PPRA rules. You have created so many inefficiencies that Pakistan is now almost a dysfunctional state which does not work for the people.”

Published in Dawn, October 16th, 2022