Daily Times

Now that every thing that could possibly halt the slide of the rupee has been tried and found wanting, the state bank is finally expected to stop its spin and put all facts in the open. From blaming previous administrations to the post-Covid demand surge to assurances that all will be well soon; the people have been led to believe just about everything. The last ray of hope was provided by the Saudi decision to lend us some more money, but since neither that nor even the staff level agreement with the IMF has been able to put a floor under the rupee, it seems central bank’s excuses, just like the people’s patience, have run out.

People, especially businesses, would also like to know about the immediate and medium-term future. The rupee is collapsing just when imports are rising and the current account is imploding, which means more dollars will be needed with time to finance record imports. And since that the epic rupee collapse is making that more and more difficult with each passing week, what are producers who rely on imports for their own exports, and therefore the government’s revenue, supposed to do? So far looking to the state bank has been not just a waste of time, but also a very big financial folly. For, each time businesses relied on its assurances they ended up getting their fingers burnt.

It’s very unfortunate that the central bank is behaving in such a manner just when everybody is lobbying for its sovereignty. For a heavily indebted country whose finances are always at the mercy of foreign lenders, giving complete freedom to the central bank and handing it over to somebody who has been leased from just those lenders, is already fraught with risks. It’s also very strange that the government hasn’t noticed just how much the state bank’s silence has made the whole situation worse. The people deserve clarity, and it is the central bank’s duty to provide it. And if it can’t do its basic job, perhaps it needs some fine-tuning itself. *