Dr Gohar welcomes Pakistan’s first current account surplus in 14 Years, but criticises interest rate policy

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2025-07-18T20:50:35+05:00 News Desk

Former Caretaker Federal Minister for Commerce and Industry Gohar Ejaz has declared that Pakistan's current account has registered a $2.1 billion surplus for the first time in 14 years, hailing it as the result of consistent economic policies and a stable exchange rate.

However, he didn’t hold back his criticism of the 11% policy interest rate, calling it economically unjustifiable in light of the current 4.6% annual inflation rate.

“This mismatch between inflation and interest rate defies logic,” Ejaz said, warning that the disconnect could derail the country's recent economic stabilisation efforts. “There’s no economic relevance to an 11% rate when inflation is at 4.5%,” he added, stressing the need for real interest rates that align with IMF commitments and basic economic principles.

Ejaz noted that Pakistan’s economic revival is reflected in a surging Pakistan Stock Exchange, which has reached the 140,000 mark, with a market capitalisation of $58 billion and a price-to-earnings (PE) ratio of 7. He compared this to the market’s $100 billion capitalisation in 2017 when the PE ratio was 12.

He further stated that the Real Effective Exchange Rate (REER) stood at 96.61 in June, suggesting the rupee is currently undervalued. “It is essential to maintain a market-based exchange rate to preserve macroeconomic progress,” he emphasized. Ejaz also warned against any manipulation of the exchange rate, saying such actions could undo three years of hard-earned economic stabilization.

Urging policymakers to stay the course, Ejaz highlighted that economic expansion is the only way forward. “To continue this journey of growth, we must ensure that the benefits reach all 250 million Pakistanis,” he said.

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