ISLAMABAD: Economists have dubbed the devaluation of rupee against dollar a preface to horrendous of inflation. The monetary policy for the next two months will be announced today.
A remarkable decline in the value of rupees against the dollar has rendered a price hike to engulf the country as it will lead to scale up the prices of petroleum products and the electricity tariff will also go up in the months of May and June.
Economic experts say that the amnesty scheme will be of no avail to the government. The people will have to keep themselves ready to face the formidable challenge of inflation in the next few months.
The ever falling exports and recurring loss to the farming community in agriculture, will have a negative fallout on the national economy. This will trigger the threat of a price hike, further denting the purchasing power of the common man.
According to experts, if the prices of petroleum products rise, then on one side, public transport fares will go up, and on the other side the cost of old vehicles will fall. The threat of increases in interest rates in the wake of rupee devaluation is daunting.
The new monetary policy will be announced for two months today through press release.
The central bank had enhanced interest rate by 0.25 per cent after 20 months in the previous monitory policy. The interest rate of the central bank stands at 6 per cent presently.
If the government succeeds in collecting Rs350 billion under the amnesty scheme, then it will allow considerable benefits to the government in the next budget. If the government fails to do so, then the threat of levying more taxes will stay.
Pakistan stands at par with the smallest country of the world, Cambodia, in terms of foreign exchange reserves. The international institutions have expressed their grave concerns over this state of affairs.
According to latest statistics released by the Pakistan Bureau of Statistics, food items were imported worth Rs450 billion from July to February. On the other hand, eatables valuing Rs421 billion were imported during the corresponding period of the previous fiscal year. Tea was imported valuing Rs42 billion with the increase of 10percent, cooking oil was imported costing Rs143 billion with an increase by 16 per cent, and dry fruit was imported worth Rs9.92 billion during 8 months.
Experts say that Pakistan will have to become self sufficient at least in its food program to bring improvement in the economy. This will be possible only if a positive comprehensive policy is chalked out.