Former President of the Islamabad Chamber of Commerce and Industry (ICCI), Dr Shahid Rasheed Butt, said on Sunday that the demand for dollars in the market should remain balanced. He said that a balanced exchange rate increases confidence in the market, which is very important. He added that maintaining the dollar’s value balances imports and exports.
Shahid Rasheed Butt said in a statement issued here today that a change in the value of the dollar affects the import and export sector, which disturbs the business environment. The business leader noted that exporters get worried when the dollar becomes expensive. When the dollar becomes cheap, imports start to increase, which causes deficits to rise. Both these situations affect the business environment.
He said that the dollar’s depreciation will increase the trade and current account deficit, which has been controlled with incredible difficulty.
The seven-month current account deficit has been reduced to one billion dollars, and the federal government has to pay 24 billion dollars in debt servicing in the current fiscal year so that no risk can be taken. He said that exporters are currently facing problems. They have to use the most expensive electricity in the region. Gas has become more costly by 300%, their interest rate is up to 25%, and fuel is also expensive.
The government had proposed to make electricity cheaper for the export sector, which the IMF rejected. In the current situation, finding another way to relieve the exporters has become necessary.
He said the government will likely sign the staff-level agreement with the International Monetary Fund next week, which will allow Pakistan to receive the last tranche of $1.1 billion under the SBA Agreement. The government has assured the international lender of jacking up the electricity tariff from July 1, while monthly, quarterly, and yearly fuel adjustments will be slapped on consumers for cost recovery.
The IMF delegation stressed the importance of the protection of people registered in the BISP program and demanded that strict monetary policy and market exchange rates be maintained.