Pakistan rupee versus US dollar: Business leaders hail government's measures

Business leaders have lauded the government's intervention to check downward slide of Pak Rupee against the foreign currencies specially US dollar as the problem of balance of payments and drop in exports had created panic in the market. Chairman FPCCI Regional Committee on Industries, Atif Ikram Sheikh said that people had started to hoard dollars due to rumors of devaluation; while political uncertainty, a record deficit and reports of some international institutions had also played role in increasing the demand for the greenback.
He estimated that money market manipulators had purchased around 800 million dollars during the last three months resulting in a crisis like situation but now the government has decided to intervene and maintain stability of Pak Rupee vis-a-vis foreign currencies, the exchange rate of dollar will come down by Rs one per dollar in two or three phases.
He said presently dollar is being sold at Rs 105.50 in the inter-bank market while its value in the open market is around n Rs 107.30 while this difference should not be more than a rupee. Atif Ikram Sheikh suggested that reputable currency dealers should also be allowed to receive remittances while the importers of gold, cars and other commodities should be allowed to buy dollars from the open market which will end their reliance on the underground market.
Meanwhile Chamber of Small Traders has asked the government to slap a complete ban on import of luxury items to protect foreign exchange reserves which will also promote local industry, employment, and revenue. Former President ICCI and patron ICST Dr Shahid Rasheed Butt told Business Recorder that revising regulatory duty on import of luxury and unnecessary items is a good step but authorities can consider a ban on imports as many countries including Iran, Nigeria, and Egypt did this to handle their economic woes.
Pakistan is importing eighty thousand luxury cars and thousands of costly motorcycles and countless other items worth billions of dollars which can be banned, Dr Butt suggested.
The veteran economist and business leader said that items which are not necessary include whey powder, grated or powdered cheese of all kinds, processed cheese, desiccated coconut, fresh grapes, watermelons, apricots, peaches prunes, apples, tamarind, cherries, pine nuts, plums, lychees, raisins and dried fruits.
Moreover, he said, import of betel leaves, beet sugar, cane sugar, white crystalline cane sugar, cocoa powder, potatoes, vegetables, pineapples, juices, soya sauces, tomato ketchup, tomato sauces and mustard flour can also be banned. We do not need foreign made perfumes, lip and eye makeup preparations, nail polishes, face and talcum powders, face and skin creams, tonics, shampoos, creams for hair, hair lacquers, dyes for hair, toothpaste, dental floss, shaving creams, ceramics, many electronics etc., he observed.
He said unabated imports have taken a toll on the local industry while many industries are fighting for their survival including the soap industry which is providing jobs to over two hundred thousand people and Rs 17 billion in the revenue to the national exchequer.
He said that increasing regulatory duty on imports or banning imports can only work when smuggling is checked otherwise all such efforts remain counterproductive. Meanwhile in their recent statements after meetings with World Bank and IMF officials, the financial managers of the country have said that Pakistan's current external financing requirements had caused unnecessary commotion; the government is focused on achieving higher, sustainable and inclusive economic growth, in order to capitalize on the hard-earned macroeconomic stability of recent years. In this regard, they highlighted the strong fiscal performance during the first quarter of the current fiscal year. Pakistan's external financing needs are at a sustainable level, and external inflows are expected to be sufficient to meet repayment obligations, they assured.