Karachi, June 20, 2018 (PPI-OT): Chairman Coordination of FPCCI Malik Sohail on Wednesday said continuous erosion in the exchange rate has emerged as the biggest threat to the economy. Increasing value of the dollar is sinking the masses in the sea of inflation while policymakers seem unconcerned which is cruelty, he said.
Malik Sohail said that the US dollar has jumped to Rs125 in the open market and has become scarce as there are no sellers but a lot of buyers. The shortage of dollars has created problems for those who want to travel abroad. He noted that the value of the dollar has increased by over Rs17 since December 2017 which indicate failure of the policymakers.
The exchange rate erosion has broken the back of masses, increased cost of production, cost of CPEC and all other developmental projects while added over Rs600 billion to the foreign debt. He noted that short supply against the strong demand will help the dollar maintain rising trend versus the rupee on the money market unless the central bank decides to intervene in a proper manner.
The increasing difference in the rate of the dollar in the open market and in the interbank has fanned money transfer through illegal channels which is set to hit remittances. The government should undertake reforms in the banking sector and reduce the cost of remittances to discourage hundi business otherwise remittances will take a blow adding to the problems faced by the government. Reduction in exports and investment can be managed by increasing export of manpower but this sector remains neglected, he said.
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