As the US dollar kept fluctuating and hit record high of Rs159 against rupee, registering a 6.5% surge in last couple of weeks, the Friends of Economic and Business Reforms (FEBR) President Kashif Anwar has urged the government to take action against shortage of dollar in local market to control heavy losses to economy inflicted by the local currency depreciation.
FEBR President expressed surprise over sudden appreciation of dollar in spite of stable situation of foreign reserves and smooth flow of remittances.
He said that the widening current account deficit, excessive government borrowing, absence of foreign flows and lack of foreign investment are the vital reasons for constant depreciation of Pak rupee.
The US dollar kept fluctuating in value both in the interbank and open market and was traded for Rs158, with the greenback registering a 5.7 per cent appreciation in the last 11 days.
In the last 10 days, the local currency has lost Rs6 against the dollar setting a new record in the interbank market.
There was no check from the State Bank. A panic-like situation was seen in the market since every offer to sell dollars was higher than the previous one. If the rupee’s slide is not stopped, the dollar may hit a new high, Kashif Anwar said who was worried about the government’s agreement with the International Monetary Fund (IMF) regarding the exchange rate management. He was confused as to why the SBP did not intervene in the market to arrest the rupee’s slide.
He called for launching a crackdown against illegal money changers, as cost of deals done by the businessmen with their foreign counterparts has increased manifold and country loses billions over devaluation of just one rupee which is detrimental.
He said that illegal international transactions in dollar-denominations via Dubai may create shortage of dollars in Pakistan open market.
Kashif Anwar said that local currency is losing position mainly due to gold smuggling from Dubai, eating up around $5 million daily. He asked the finance minister to direct Federal Investigation Authority (FIA), Intelligence Bureau, Custom Intelligence and State Bank of Pakistan to keep strict vigilance to control currency and bullion smuggling.
He said the State Bank should immediately take notice of the situation which is causing panic in the currency market.