Can Pakistan’s currency remain the ‘best currency in the world’?

Can Pakistan’s currency remain the ‘best currency in the world’?

Can Pakistan’s currency remain the ‘best currency in the world’?

According to Zafar Pracha, General Secretary of Currency Exchange Association of Pakistan, some steps are necessary to keep the rupee strong. If a subsidy of up to five percent is given to overseas Pakistanis for sending dollars, the rupee can be further strengthened.

Bilal Aslam deals in imports, manufacturing and exports. He read the news on the American magazine Bloomberg that the Pakistani currency can be counted as the best performing currency in the world after the increase of 5.4% in the month of September.

Bilal is very happy with this news but he is also worried. He told Independent Urdu that the currency has risen faster than the rate at which it has fallen in the past. If the same happens this time too, the business situation will go out of control.

He says that uncertainty has increased in the market. My property is not selling. Business has stopped. The cash crunch has arrived. I have also stopped buying so that when the dollar stops at one place, I will buy again. If the government wants, it can bring the dollar to 260 rupees in a day and keep it at that rate for a year. If the government fixes the dollar rate for one year, the businesses of millions of people, including me, can run.

Regarding the situation of the Pakistani rupee, the General Secretary of the Currency Exchange Association of Pakistan, Zafar Pracha, told Independent Urdu that some measures are necessary to keep the rupee strong. If a subsidy of up to 5% is given to overseas Pakistanis for remittance of dollars, the rupee can be further strengthened. About 30 percent subsidy is given to exporters in electricity, gas and other matters, which should be stopped. Some concession should be given to those exports which are cashed through the bank. Exports of 200,000 dollars should be made mandatory for those who import 100,000 dollars

According to him: “Further tightening of the ring around gold smugglers and luxury car importers could keep the rupee strong. The largest use of handi and handover is in these two sectors, which causes the dollar rate to rise. Money exchange people are notorious.

A currency dealer counts US dollars at his shop in this photo taken in Karachi on January 11, 2022 (AFP)

Former finance minister Hafeez Pasha told Independent Urdu: “It will be seen how the balance of payments is in September.” It probably won’t get any better. Exports have declined by five percent so far in the new financial year. Remittances have decreased by 24%. Inflation has risen to around 31 percent. In such a situation, a five to six percent rise in the value of the rupee in a few days is too much. Administrative matters have improved but only administrative improvements to control the dollar are temporary. The country needs such a policy, which will increase the confidence of friendly countries and investors.

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Salim Amjad, Chief Executive Officer of Link International Exchange, says that this is not the first time that the value of the dollar has been continuously decreasing, but the value of the dollar has seen many fluctuations in the last two years.

He told Independent Urdu: “In August 2022, during the tenure of Miftah Ismail, the dollar had come down from 240 to 213 in the interbank. This difference comes to about 27 rupees. Then it had increased to Rs 240. When Ishaq Dar returned, the dollar continued to depreciate little by little on a daily basis. It stopped at 219 at the interbank in October 2022. This reduction was also around Rs 21, but in a few months it increased to Rs 250 and then to Rs 288. During the caretaker regime, the dollar touched around Rs 307 interbank and the dollar has so far fallen by only Rs 19 interbank in the month of September, which is less than the big falls in the past.

He further said that every year seven and a half lakh Pakistanis are going abroad. Those who go out sell the property and send it out in exchange for dollars. Every month, one lakh Pakistanis are going for Umrah, carrying dollars with them. The use of credit cards has increased tremendously.

Earlier it was five hundred million dollars a year, now it has increased to almost one billion dollars. Loans and interest payments are to be made in dollars. One way to meet all these needs is to increase exports, second is to increase remittances and third is foreign investment. If Pakistan excels in any of these sectors, the dollar can remain under control. Otherwise, the pressure on the rupee may increase after December.

According to Salim Amjad: “Pakistan’s income in dollars is about 60 billion dollars and expenditure is about 85 billion dollars.” Closing the gap of 25 billion dollars is a challenge.