PEW asks govt to stem fall in forex reserves, exchange rate

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ISLAMABAD: The Pakistan Economy Watch (PEW), on Sunday, asked the government to curb fall in forex reserves and exchange rate. Fall in value of rupee against US dollar and falling reserves that are now around 14 billion dollars have raised concerns among the masses and the business community, it said.

Serious efforts should be made to save hard-earned gains achieved by the county after taking tough actions under the last International Monetary Fund (IMF) loan programme, said PEW President Dr Murtaza Mughal.

An immediate action is required otherwise the situation might go out of control exactly at the time of the general elections next year with no other option but to seek another bailout package from the IMF, he added.

Dr Murtaza Mughal said that the value of rupee has nothing to do with the export competitiveness and erosion in the exchange rate has a very little and temporary impact on the exports.

He said that reduced exchange rate will damage masses by making imports costly and stoking inflation as devaluation will not support the exports as expected while the masses will pay the price for wrong decisions of the policymakers.

He said that export sector has been addicted to subsidies, bailouts, and currency devaluation which has always been against the interests of the masses but this sector is not bothered about the outcome of their irrational demands.

He said the situation will lead the government to borrow more to stabilise forex reserves is not sustainable.