ISLAMABAD: The All Pakistan Business Forum (APBF) on Sunday called for bold and effective action as the rupee continues to follow a volatile trend in the trading process against the dollar and other major currencies despite the fact that the program of the IMF is now back on track, securing external financing needs for the current fiscal year.
APBF Chairman Syed Maaz Mahmood observed that being back in the IMF program amid falling global commodity prices and full coverage of external financing needs, there is no There is no reason to continue the high volatility in the exchange rate, as the local currency suffered losses throughout the week, and was hovering at the 235 level against the US dollar in the market.
He said the influx of funds from the International Monetary Fund helped add to the Pakistani rupee’s gains for just a few sessions. However, economic troubles continued to engulf Pakistan which reported its consumer price index (CPI) at a multi-decade high of 27.3% on an annual basis in August 2022 from a year earlier. , as authorities warned that massive flooding in the country could exacerbate already soaring prices.
APBF Chairman Ibrahim Qureshi said that having a clear policy to curb volatility in the foreign exchange market, the central bank should be fully ready to act and monitor movements more vigilantly and should be ahead. on the curve because it has more information than an average market. player.
Ibrahim Qureshi said the foreign exchange reserves held by the State Bank of Pakistan are not yet stable as the reserve position is critical for Pakistan which is desperate for dollar inflows to meet its balance of payments needs. . A low level of reserves put severe pressure on its currency market, as the rupiah recorded its worst monthly performance in July in more than 50 years.
APBF Chairman Syed Maaz Mahmood observed that apart from increasing exports and controlling imports, the government will have to take administrative measures as a high demand for cash dollars is seen in the market. He said there was a complete collapse in economic policy-making as the country’s fiscal policy had become subordinated to monetary and exchange rate policies.
He said the central bank has a stated policy of intervening where volatility needs to be contained without changing direction, which is now largely determined by the market. The policy continues vigorously on the daily movement. However, volatility on a weekly or monthly basis often proves detrimental to businesses. As the exchange rate is flexible, speculators jump in; they make money fast due to currency volatility.
It should be noted that globally, the dollar was heading for its continued gain and was near its highest levels in decades against the euro and the yen, as investors were unsure. mood to sell ahead of US jobs data that could bolster the case for aggressive policy. interest rate hikes.