Malik Muhammad Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP), said the State Bank of Pakistan bought $27 billion over the past three years to stabilize the exchange rate and keep the US dollar above Rs200. He criticized the interbank market for not operating as a true free market, noting that banks often don’t have dollars available for conversion.

Bostan argued that a genuine free-float system is feasible only when foreign exchange reserves reach around $70 billion, highlighting current low reserves as a barrier. He also linked political instability to economic challenges, urging dialogue among political parties to foster stability and investment.

He expressed concerns over the declining national savings rate, now at only 6.4%, and the timely payment issues faced by farmers. Addressing climate vulnerabilities, Bostan called for building major dams or a network of smaller dams to manage floodwaters and preserve water resources for agriculture. He emphasized the need for adequate preparations to face climate change challenges.