ISLAMABAD: Seasoned politician and chartered accountant Ishaq Dar took the oath as Pakistan’s new finance minister on Wednesday, the prime minister’s office said, as the country fights an economic crisis exacerbated by devastating floods.
It is Dar’s fourth stint as finance minister, and he will have to deal with a balance of payment crisis, foreign reserves falling to barely one month of imports, the rupee tumbling to historic lows and inflation crossing 27%.
Dar, who currently holds a seat in the upper house of parliament, was given the job after his predecessor Miftah Ismail quit, the fifth holder of the post to leave in less than four years amid persistent economic turbulence.
Dar is known to favour intervention in currency markets to keep the rupee stable.
The rupee has been gaining firmly ahead of his appointment and Pakistan stocks also responded positively at the opening on Wednesday before he was sworn in.
The senior politician from the ruling party of prime minister Shehbaz Sharif
flew to Islamabad on Monday night after ending five years in self-exile in London.
He had left Pakistan in 2017 leaving pending corruption cases, which he says were politically motivated.
An anti-graft court last week suspended his arrest warrants enabling him to get back without being held.
Analysts say Dar’s main mandate is to arrest the rising inflation that was mainly the result of unpopular decisions his predecessor took to adhere to the preconditions by the International Monetary Fund (IMF), including rolling back power and fuel subsidies given by ousted prime minister Imran Khan in his last weeks in power.
The Sharif-led coalition government says it inherited a wrecked economy after Khan was ousted in a vote of no-confidence in April, a charge the former premier denies.
As the new government took over, the IMF’s $6 billion bailout package agreed in 2019 was in the doldrums because of the lack of an agreed policy framework.
The IMF board last month approved the seventh and eighth reviews of the bailout programme, allowing for a release of over $1.1 billion.
The tranche, according to former finance minister Ismail, is likely to be enhanced after Pakistan’s request to deal with the flood’s economic losses, estimated to be around $30 billion.