Govt action fails to stop dollar hike

ISLAMABAD: A day after the prime minister called exchange rate companies’ association and asked them to bring down the dollar value to Rs144, which at that time went up to Rs146, the inter-bank exchange rate remained at Rs147 on Thursday, while the authorities did nothing to control it.Dr Hafeez Pasha, while talking to The News on Thursday, said that it transpires from the inaction of the authorities that they have totally surrendered before the IMF on economic issues. Now the government is no more the last resort to take decisions on economic issues. When the inter-bank rate Thursday swelled, it means the government itself increased the value of dollar.Dr Pasha said this is the initiation of first prior action enabling the government to qualify for the agreement with the IMF. He said that with further devaluation of rupee in just two days, Pakistan piled up extra burden of loans amounting to Rs650 billion.Dr Hafeez Pasha said the government seems to initiate next budget with 10 percent inflation from June that will alarmingly increase on average 15-16 percent in next year. However, by June 2020, the inflation will be hovering at 20 percent.“This will be intolerable by the people who are already facing the tremendous hike in inflation that has jacked up to 4 percent from the PML-N government to over 8 percent in first nine months of the PTI government,” he said.Dr Pasha said that in March 2019 alone, large manufacturing scale (LSM) showed 10 percent negative growth if compared with same month of last year. In first nine months of this government, the industrial growth went down by 3 percent.“This is quite alarming development which needs quick attention,” he said, but in the same breathe, he spoke his mind saying that in the presence of IMF’s prior actions asking for taking back the concessional loans, zero or less duty on raw material used for export industry, and provision of RLNG at cheaper rate of 6.5 cents per mmbtu and electricity at 7.5 cents per unit, regulatory duties on imports and margins on exports and stressing the government to extend the better exchange rate only to export industry and nothing else. So under this scenario, he said, exports will never increase as the input cost will increase manifold, making Pakistani products in the global market uncompetitive.However, independent economists requesting not to be named said dollar went up by 5 percent from Rs143 to Rs147-148 in two days as a part of prior action. They said that US dollar will further hike by end of next financial year to Rs178-180.

from The News International - National http://bit.ly/2Hvg2Oj