Economy and common man paid a heavy price after 32 percent devaluation of rupee against dollar in the last 3.7 years. In this regard its need of the hour Parliament should intervene and may summon Governor State Bank to seek concrete explanation on the unjustified devaluation said Vice President of Pakistan Businesses Forum (PBF) Ahmad Jawad.
He said the weakening currency impacted the consumers’ purchasing power as devaluation fuelled inflation. “With devaluation, there is inflation, when there is inflation, your disposable income goes down, which affects consumption behaviour and spending power. There is a decline in aggregate demand, which is why there is an economic slowdown.
Ahmad Jawad also said our monetary policy may effects day-to-day life of the common man which includes its effects on poverty, inequality and other social out comes. SBP, therefore, needs to assess, consider and communicate the side effects of monetary policy to the public for greater transparency, as well as to the government in order to align fiscal and regulatory policies to counter these unintended consequences.
Today State Bank of Pakistan reserves stood around at 16 billion dollars, two billion dollars are on the way of the IMF trans, Chinese debt is also going to rescheduled but still exchange rate at 182 against one dollar; even current account deficit shrinks to $0.5 bn; but still incumbent country’s economic team were forced for depreciation from international donors and it’s nothing related with the fundamentals and its one of the international agenda to weak Pakistan economically, as strong currency may impact the country economic outlook.
Now, Parliament of this country should understand where we are heading in rupee? The appreciation of the rupee is inevitable for the country. Until and unless we can’t do we will remain in the viscous circle of the inflation and keep enjoying the sky rocket rates of every commodity from automobiles sector to food items.
Jawad further briefed that the value of the Pakistani rupee has fallen by 31.2 percent against the US dollar over the last three years and six months under the government of Pakistan Tehreek-e-Insaf (PTI). Took from Rs123 against the US dollar in August 2018 after sworn as PM to Rs 182 against the US dollar till March 16th 2022.
Similarly in automobiles sector deprecation supported much of the country automobile players. They increased their prices of about 72% regardless their assembly plants in Pakistan. Only few parts have to be imported.
On the other hand the cost of essential medicines had also risen. Even the prices of Active Pharmaceutical Ingredient (API) of the common medicine, which is imported from China over the past years owning to rupee depreciation, have increased manifolds.
He openly viewed the recent devaluation of the currency was dictated by the IMF through prior actions and it has nothing to do with macroeconomic fundamentals.
However the regional currencies versus the US dollar show that the Pakistani currency experienced massive depreciation compared to others.
The Indian rupee stood at 75.39 against a US dollar. The Indian rupee stood at Rs70.09 against the US dollar in 2018, Rs73.66 in December 2019, Rs74.53 in March 2020 and Rs74.57 in April 2021.