Chairman Businessmen Panel (BMP) Mian Anjum Nisar has said that Pakistan is currently facing significant economic challenges, with declining foreign exchange reserves, diminishing growth and increasing trade deficit. He said that rupee once again weakened touching all time low in an apparent devaluation. He noted it occurred four days after the government secured a bailout from the International Monetary Fund which investors speculate includes tough conditions to reform the economy.
Anjum Nisar said the rupee dropped to 148 a dollar which showed making it the worst performer in a basket of 13 currencies in Asia. Even in Afghanistan, one dollar is equal to 79 afghani and in Nepal one dollar equal to 112 Nepali rupee. He cited that the State Bank of Pakistan had devalued the currency five times last year and raised interest rates by 475 basis points as it sought to contain the financial blowouts from Pakistan's twin current-account and budget deficits.
"It seems to be an open market policy now. It appears they have decided to adopt it," he said, urging that one should understand free float dollar is not suitable for Pakistan economy that is very small. He urged market players they must not play with their own economy just to gain some bucks.
BMP chairman said that government went for an easy option to adopt IMF loan with was not even big compared to their terms, instead of structural reforms and cutting its expenditures. He said government should have shut down those around nine federal government ministries which have no use or may be merged with each other.
He said if Prime Minister pledges to nation that after successful three years of IMF program, rupee value will get stable and our exchange rate will be seen around 120 rupee then we as a business community supports this. But, if dollar will not reverse after three years and keep increasing like this; then this IMF program cannot be called suitable.
Yet, instability and speculations are on high side which is not a good omen for industry, he said, adding that despite currency devaluation and subsidies offered to various sectors, the country's exports declined by 1.54 per cent during April, according to the latest data released by the Pakistan Bureau of Statistics (PBS).
Mian Anjum Nisar cited that the PBS data shows that exports during the month of April declined to $2.094 billion compared to $2.127bn during the same period last year. Moreover, export proceeds during the first 10 months of the current fiscal year also fell by 0.12pc to $19.169bn compared to $19.191bn last year. Cumulatively, in rupee terms, exports recorded 23pc growth during the period under review. Meanwhile, Businessmen Panel for FPCCI has also appreciated the appointment of tax expert Shabbar Zaidi as chairman of the Federal Board of Revenue (FBR).