KARACHI: Commercial banks and private currency dealers pumped dollars into the money market to stop further falling of domestic unit in value versus dollar.
Around an estimated $235 million were put into the market by these two currency controllers besides holding of exporters and forward deal holdings of leading importers in the country were also used to help out the rupee, said forex dealers.
This step was taken after State Bank of Pakistan’s intervention in money market mechanism as the bank asked commercial banks to pump dollars.
Overall, the domestic unit shed around 5.1 percent in three trading sessions since Friday and the current steps helped out the rupee to some extent and ended in a narrow band on Wednesday.
The domestic unit stood at around Rs 110.54 against Rs 110.93 closing versus dollar. The dollar showed a high of Rs 111.12 and low of Rs 110.35.
Analysts said economic managers in the helm of government and finance should take concrete measures to control imbalance between imports and exports.
The economist and leading export-oriented sectors’ businessmen were of the view that fall in domestic unit value will likely to increase general prices of commodities.
Senior executive members of Pakistan Tanners Association and Pakistan Yarn Merchants association Agha Saiddain and Ghulam Rabbani have maintained that Pakistan has already failed raising tax revenue from the present 12 percent of gross domestic product to 15 percent by 2016.
The country’s foreign exchange reserves for payment of export bills and bills on oil, commodities and major raw industrial materials’ imports are also under immense pressure as demand for dollar has increased.
Government has to give incentives to export-oriented sectors including energy solutions, lowering tariffs on utilities, value addition imports and increase share of direct taxes in revenue.
It is blessing in disguise that exports values could be increased during the period of strong dollar versus rupee in coming months with depreciation of rupee against dollar, they opined.
On the other hand current account deficit of the country in July-October 2017 has been increased from $2.25 billion to $5 billion during July-Oct 2017 as compared to same months last year.
The overall size of the debt has risen to Rs 23,990 billion from Rs 22,992 billion recorded on June 30, 2017.
The debt on every Pakistani has increased. Overall debt burden has been increased by Rs 429 billion, but on every Pakistani it has been increased to Rs 1,795 to Rs 116990 from Rs 115,230.
Published in Daily Times, December 14th 2017.