PBF demand steps needed to strengthen PKR other wise country into myriad of problems

43

The Pakistan
Businesses Forum (PBF) said despite the
resumption of the IMF
programme, the country is still suffering from a
serious depreciation crisis; as the rupee has
cumulatively fallen from 213 to 237 against the
greenback since September 2nd which needs to
be fixed by ending market speculation through
State Bank of Pakistan.

PBF Vice President & CEO, Ahmad Jawad said
finance minister will have to announce a clear
policy on the rupee as sorrows of the trade and
industry in terms of high inflation, loss in
employment, and lower profitability is not easing
despite the restoration of the IMF programme,
as the electricity concession for the exporters has
been withdrawn while petroleum levy on petrol
and diesel have to be increased to Rs 50 per liter by
Jan 2023, and perhaps, after that, the next
step is to impose GST which is not good indicators
for the country’s economy.

Bond and currency markets, which had shown
more confidence in Pakistan after the IMF deal,
are again pricing in a high risk of the country
defaulting on its foreign debt. Since the end of
August, the yields on some of the government’s
international bonds have jumped by a third,
while the currency is one of the worst performing in
Asia.

Jawad said that tax revenues, industrial production
and other targets set by the government have
been shredded. “All the figures have gone haywire,”

Despite PBF believes that real effective exchange
rate (REER) of the dollar against the rupee is
less than PKR 200 for a dollar; and, for all practical
reasons, the current depreciation cycle is the
direct result of speculative trading, lack of
regulatory oversight and mismanagement of the
forex
market.