An extraordinary increase in the value of the dollar was seen after the announcement of the restoration of the loan program by the International Monetary Fund (IMF), why the situation could not be sustained for long. Pakistan’s businessmen and industrialists have also stressed that the government and the State Bank of Pakistan should immediately take notice of the fact that the Pakistani rupee has entered another round of devaluation.
Economists say that despite the infusion of funds from the IMF, the rupee is under increasing pressure due to import payments and damage caused by the country’s devastating floods. In addition, the reasons for the depreciation of the rupee are the increase in the dollar index in the international market and the non-receipt of the amounts announced by friendly countries.
The representatives of foreign exchange companies say that the installment of IMF is small and other international organizations and friendly countries had announced giving dollars to Pakistan but it has not been implemented yet. They further said that there are various reasons for the increase in the value of the dollar, including the pressure on the rupee due to floods, and because of this, there will be more pressure on exports as Pakistan imports most of its goods.
It is also a sad fact that due to the allegations of corruption in Pakistan on the political front, more funds could not be received from other countries and institutions even after the flood. According to currency dealers, another major reason for the depreciation of the rupee is the smuggling of currency to Iran and Afghanistan. The movement of people across the Pak-Iran and Pak-Afghan borders also gives a route for smuggling dollars from Pakistan, and these notorious practices also put pressure on the rupee.
Another reason for the increase in the value of the dollar is different commodities smuggling because the government has imposed a heavy duty on the import of expensive goods, due to which the smuggling of these goods has increased. Before the imposition of duty on imports of expensive goods, the open market was running below the interbank rate, but currently, the open market is running above the interbank rate by about eight rupees.
According to foreign financial institutions and economist reports such as investment banking firm JS Global, Pakistan faces a major balance of payments problem. In addition, the floods have caused widespread destruction, which is feared to increase food prices by up to 15 percent or above.
Pakistani analysts also say that the international community’s response to help Pakistan deal with natural disasters has been slow and the country has not yet received any substantial cash aid. The Secretary General of the United Nations, on the occasion of his visit to the flood-affected areas of Pakistan last week, has appealed for massive international aid for Pakistan, whose damages have been estimated at 30 billion dollars.
Market sources at the national level said that if basic food items are expensive, then the difference will also increase the interest rate.
It is also a fact that 1.2 billion dollars have been received from the IMF but the payments to be made are more than that. The rise in prices of petroleum products has also increased external payments. Currency Exchange Dealers say that the market is completely dry and dollars are not coming in and Pakistan has not received dollars from the Asian Development Bank, Saudi Arabia, and the Emirates after the IMF debt relief program due to the improvement in the market. They further said that political chaos is also contributing to this situation and the government does not show any control.
They maintained that due to the government’s lack of grip on the issues, the banks took advantage of the past few days and continued to buy the dollar at a low price and sell it at a high price. There appear to be some measures taken by the State Bank to stabilize the value of the rupee, but the government does not seem to be in sync with them, which suggests that the government may want to distance itself from the process. According to them, the depreciation of the rupee against the dollar will continue in the coming weeks.
In the coming weeks, the value of the dollar will remain close to 240 rupees and in case of foreign aid or support from friendly countries, its value may decrease. These facts also have to be seen that the overseas Pakistanis who are a source of domestic foreign exchange recipients annually send moreover to 32 billion dollars to their country, but they are unhappy with the current political setup, the social media team of Muslim League-N, which has spread this propaganda on a very large scale that Qadianis constitutes the largest number of Pakistanis living abroad and therefore we do not give them the right to vote.
This false propaganda has also hurt the religious sentiments of all those Pakistanis who believe at the end of Prophethood and who accept Khatam-ul-Nabi’in Hazrat Muhammad Mustafa (peace be upon him) as the last prophet. In the present scenario, they are sending their money only for family expenses, not investing.
