SBP intervention to stabilise the rupee remained futile: PEW

Policy rate hike, ban on luxury imports demanded
Afghan asett freeze triggered outflow of dollars

The Pakistan Economy Watch (PEW) on Saturday said the efforts of the State Bank of Pakistan (SBP) to stabilize the local currency has left much to be desired.

The central bank has pumped $1.23 billion dollars in the market to stabilize the rupee but to no avail, as the local currency has depreciated by Rs12 in the current fiscal, it said.

Government should immediately ban the import of luxury items while State Bank should hike policy rate to reduce demand to stabilize the rupee and reduce the speed of hike in the prices of essential items, said Dr. Murtaza Mughal, President PEW.

Fall in the value of the Pakistani rupee, the inflation rate in the domestic consumer market will increase further and it will have a bad effect on the general public, he added.

Dr. Murtaza Mughal said that artificial development finance through loans will never result in prosperity as imports worth $6.25 billion in one month and exports of around $ two billion have resulted in a monthly trade deficit of four billion dollars which is unsustainable.

He noted that the import of mobile phones worth two billion dollars and nine hundred vehicles was a wrong decision which was based on a desire to enhance revenue.

He said that the US and allies are not happy with the developments in the region and they are hatching conspiracies against Pakistan. Freezing the assets of Afghanistan is part of the plot which has burdened Pakistan and resulted in a massive outflow of dollars to Afghanistan.

Dr. Mughal said that hike in the value of the dollar can be an international conspiracy as some global and regional powers are not ready to accept the enhanced role of Pakistan and they are trying their best to harm Pakistan.

He demanded an inquiry into the hike in the value of the dollar which is damaging the economy and bring to justice if some elements are involved in it.

In: Pakistan Economy WatchAuthor: pakistaneconomywatch