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Wednesday, November 30, 2022
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EditorialBeating the dollar flight

Beating the dollar flight

When Finance Minister Senator Ishaq Dar took over last month, the dollar had stopped its upward trend. In recent days, the rupee, however, broke its streak, giving in to the dollar’s might. Realising the situation, Finance Minister Ishaq Dar has sprung into action and has asked all the major forex exchange companies to cooperate with the government in ensuring proper currency exchange rates. In a meeting, he assured the stakeholders that Pakistan will fully repay its domestic and foreign debts. This is a timely reminder to the world, which has been talking of Pakistan’s prospects of defaulting on foreign debt payments after severe floods hit the country, incurring a loss of $40 billion altogether. The minister also warned the elements involved in smuggling and hoarding of the dollar, saying their illegal actions would only bite them. Warning aside, the need of the hour is that hoarding and illegal trade of dollars should be checked and an iron hand should be put on the perpetrators.

Mr Dar, when he took office recently, had vowed to depreciate the dollar, and improve the economy and he is undoubtedly committed to fulfilling it. On the other hand, the level of foreign reserves of the State Bank of Pakistan has come down to $5.7 billion and this is an alarm bell. The Asian Development Bank has recently given a loan of $1.5 billion, but there is a need for a solid and sustainable increase in national reserves. However, the collapse in the value of the dollar is substantial in its place, with the positive benefits being seen in the form of lower inflation, a reduction in the volume of foreign debt, which has so far exceeded Rs5 trillion, and raw materials for the export sector. Imports will receive financial relief, which will increase their growth chances. The drop in remittances from abroad Pakistanis must also be addressed. It would be preferable to accelerate industrial and commercial activity, which would enhance investment and job possibilities while also creating conditions that would encourage individuals to save again. Also, the government must pay attention to the ongoing political turmoil in the country. Only a politically-stable government can deliver.

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