APBF President for policy reforms to control rupee depreciation.
Byline: Salim Ahmed
Lahore -- As the State Bank of Pakistan (SBP) governor has indicated further devaluation of Pakistani currency against the greenback, the All Pakistan Business Forum (APBF) has urged the government to control surge of dollar against rupee, because huge depreciation of Rupee continue to damage national economy
The APBF president Syed Maaz Mahmood observed that cost of deals done by the businessmen with their foreign counterparts has increased manifold due to massive fall of rupee against dollar. Though the exports of the country are recorded at $24 billion against the huge imports of $60 billion with a deficit of $36 billion but government needs to take administrative measures, as cash dollars are being flown out of three major airports in Pakistan.
He also appreciated the positive development, related to the imports, which have now started decreasing in this financial year followed by the government's initiative of imposing regulatory duties. The imports in the early months of the financial year 2017-18 were increased by 24 percent. The APBF President said that the widening current account deficit, excessive government borrowing, absence of foreign flows and lack of foreign investment are the vital reasons for constant depreciation of Pak rupee.
Terming rupee depreciation against dollar a mysterious development, the leader of business community said that continued fall of rupee is not understandable with a fact that there was no fundamental change in country's imports during last three months while other economic indicators are also same for a long time. He said that there was no fundamental change in imports for the last couple of months, which could become a reason for rupee depreciating. He was of the view that State Bank of Pakistan and Ministry of Finance should keep eye on it and trace out the group involved it.
Syed Maaz Mahmood pointed out that the State Bank and the government need to intervene and come up with policy reforms to control depreciation of rupee which is becoming more and more valueless. He said that it was unfortunate that Islamabad had announced to start its financial transaction with several countries under currency swap agreement in March 2013 aiming at controlling its import bill and balance of payment, but no implementation is seen so far.
Maaz observed that causes of depreciation of a currency are multiple which in combination push and pull the respective currency's quotation in conjunction with other currency. If there is more demand for dollars in Pakistan than the supply, rupee would depreciate. So, the government should take steps to commence trade with other countries in local currencies with special emphasis on greater foreign investment in Pakistan's lagging value-addition economic activities for making meaningful improvement in bilateral trade balance.