The falling rupee
Background: Between May and September, the rupee went from Rs 152 per dollar to Rs 173 per dollar. That’s a healthy drop of Rs21 in 123 days. This sharp fall in the value of the rupee has not happened in the past four decades (since the breakup of the rupee in 1982). That’s a 14 percent loss in about 80 business days. Between mid-June and the first week of September, the SBP reportedly injected $ 1.2 billion into the interbank market in an attempt to stabilize the rupee – but to no avail. The rupee continued to fall.
Import-Export: In July-August, our imports increased by 73% to reach 12 billion dollars. This is a new two-month record in Pakistan’s 74-year financial history. In July-August, our exports amounted to the paltry sum of 4.5 billion dollars. That meant a trade deficit of $ 7.5 billion – another record in our 74-year financial history.
Weaponizing Finance: Over a decade ago, the US Department of the Treasury (the equivalent of our Department of Finance) teamed up with the Pentagon to wage a financial war. Over the past seven years, the role of the US Department of the Treasury has evolved – “the evolution of the national security role of the Treasury.” Jack Lew, the 76th US Secretary of the Treasury from 2013 to 2017, was instrumental in this development.
Jack Lew Initiative 1: âInstead of fighting countries militarily, the United States can now cripple them financially. Jack Lew Initiative 2: The Role of Financial Tools in Advancing US National Security. Jack Lew Initiative 3: “Open a new battlefield for the United States, a battlefield that allows us to pursue those who wish us evil without endangering our troops or using lethal force.” “Initiative 4 by Jack Lew:” Our determination to use all the tools at our disposal to advance our strategic interests. Jack Lew Initiative 5: âAs we continue to use – and increasingly rely on – financial measures to help us achieve our fundamental foreign and national security policy objectives. “
In 2019, WikiLeaks leaked a document allegedly authored by the US Army Special Operations Forces Unconventional Warfare. This is what the document says: “Like all other instruments of American national power, the use and effects of financial weapons are interdependent and must be carefully coordinated … The World Bank (WB), the IMF and the World Organization trade (WTO).
A âfinancial attackâ has three distinct characteristics: it is indirect, unattributable, and difficult to detect. Pakistan’s tertiary capital – currencies and international debt instruments – is under attack. The aim is to provoke a liquidity crisis.
On September 13, Secretary of State Blinken told Congress that the United States would “review its relations with Pakistan … to define what role Washington wants. [Pakistan] play in the future … “On September 27, 22 Republican senators in the 117th Congress proposed a bill” Require the imposition of sanctions on the Taliban and those aiding the Taliban … “. The” government of Pakistan “has been mentioned three times. It is the law in tandem with the financial war.
The Pakistani armed forces regularly assess their vulnerabilities and then work on developing countermeasures. We need to ask three questions. Question number 1: Have we ever formally assessed our non-military vulnerabilities? Question number 2: Have we ever mapped our financial loopholes? Question number 3: Have we already mapped out our critical financial functions? Remember that the falling rupee is a symptom, not a disease.
The writer is an Islamabad-based columnist.
E-mail: [emailÂ protected] Twitter: @saleemfarrukh