KARACHI: Chairman of National Business Group Pakistan and President Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain has said that the delay in the agreement with the IMF has started further devaluing the rupee as investors are not ready to believe in hollow statements but they want something concrete.
He said that the currency market is in turmoil due to which the falling US dollar has started stepping up again and the rupee has started depreciating, which is a disturbing sign.
He said those who spread rumours of financial emergency have caused severe damage to the economy and action should be taken against them.
Despite the government’s denial of the imposition of a financial emergency, the situation is not returning to normal, which is worrisome, he said.
The rupee had started stabilizing after the government increased the prices of petroleum products and electricity tariffs, but rumours have again changed the situation, he said, adding that the government officials should not issue further statements, but to focus on finalizing the agreement with the IMF and take an immediate loan from China.
He said that it is difficult for the Pakistan rupee to remain stable against the US dollar unless foreign loans are realized.
Mian Zahid Hussain added that in the current financial year, Pakistan has imported $20 billion worth of petroleum products, $9 billion worth of food items, $4 billion worth of palm oil, $2 billion worth of cotton, $1 billion worth of tea and $4 billion worth of vehicles. It is not difficult to estimate from these figures that the current trade and current account deficit of Pakistan are due to unnecessary and irresponsible imports, he observed.
The present government has to significantly reduce unnecessary imports while promoting agriculture in the country. The import of unnecessary food items has to be stopped. Due to the current difficult economic situation, import and trade costs are increasing, while the government will have to import large quantities of oil to end load shedding, which will increase burden on the treasury.
The price of LNG in the international market is also rising which is worrying but despite all the problems, the economic situation is not as bad as is being perceived in the currency market. Foreign exchange reserves are now nine billion dollars, while they are much lower than in the past but the country would soon come out of difficulties, he hoped.
Copyright Business Recorder, 2022
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