Summary PEW says country heading towards dollarization after renewed agreements with IMF.
ISLAMABAD (Online) - The Pakistan Economy Watch (PEW) on Thursday expressed grave concern of dwindling rupee holding government responsible for the mess.
Government has been systematically damaging local currency to live up to the secret agreement reached with the IMF without considering its implications, it said.
The deal with the lender has made rupee one of the world’s worst-performing currencies; it has raised cost of external debt servicing, cost of domestic debt, cost of imports and opened floodgates of inflation, said Murtaza Mughal, President PEW.
Talking to President IWCCI Farida Rashid, he said that the demand for dollar is set to increase leading to dollarization of the economy where people keep their savings in dollars as hedge against inflation while use local currency for daily expenditure only.
The continuous fall in rupee value has been multiplying the cost of doing business for those who rely on imported industrial raw materials and machinery, he said adding that government has been sacrificing national interests to fulfil preconditions of IMF.
He said that greenback value against the rupee was Rs59 in Dec 2001, it was Rs98 in Dec 2012 and now it is around Rs105 which proves failure of the successive governments.
At the occasion, Farida Rashid said that IWCCI had proposed simple and implementable step to boost dwindling foreign exchange reserves by using the potential of over ten million Pakistanis expatriates through friendly schemes.
Government would have broken the begging bowl if it had accepted the IWCCI’s proposal to allow any expat to import a duty-free automobile after remitting to one million dollars, she said.
If authorities can relax duties on hybrid cars which are yet to be arrived, why it can’t act on a scheme to raise tens of billions from overseas Pakistanis to avoid tough conditions of the IMF, she questioned.
She rejected the half-hearted corrective measures by authorities terming them mere eyewash which will push economy towards a serious crisis.
Economic foundation cannot be built on hunger, poverty and social unrest, she said, adding that the situation will continue to worsen until Pakistan enters into Currency swap arrangements with more nations, budget deficit is contained, imports are reduced and exports of goods and services are increased.
