All Pakistan Business Forum says that government has to make a long-term strategy to control import bill
Lahore, October 11, 2013 (PPI-OT): The All Pakistan Business Forum has said that the government has to make a long-term strategy to control import bill, as the demand of hundreds of millions of dollars for crude oil purchase is the major reason of free fall of rupee.
“The all major banks wanting to cover the oil import deal rushes to open market for maximum buying of dollar, putting abnormal pressure on a local currency market. So, government has to find out alternative solutions of energy to minimize its dependence on import of oil- the main cause of dollar pressure on rupee. Economic managers need to handle the markets, as the market is lacking direction and suffering from a negative perception of high value of greenback,” APBF Chairman Nabeel Hashmi observed.
He stated that there is no short-term solution to control the rupee deprecation, because it remains under pressure when imports increase against exports. So, to ease pressure on rupee, the economic managers have to control widening gap of trade deficit by enhancing exports through providing incentives to industry, he added.
The APBF chairman urged the government to stabilize US dollar at Rs.104 as basic fundamentals of economy are comfortable and not so bad.
Nabeel Hashmi expressed the hope that exchange rate will be stabilised soon due to buoyant inflow of remittances by the overseas Pakistanis ahead of the Eid-ul-Azha, supporting the rupee against the US dollar. However, he said that the continued capital outflows should also be curbed through implementation of anti-money laundering laws effectively by setting up monitoring and reporting about the foreign exchange transactions.
He said that that effective coordination of SBP with the Federal Investigation Agency to check illegal transfer of foreign exchange through airports may be fruitful.
He said the regulator should have eye on the exchange companies, checking the business of hundi as well as hawala in the country. He said that SBP has powers under the Foreign Exchange Regulation Act, 1947 to monitor and regulate dealings in foreign exchange and import and export of currency.
Nabeel Hashmi pointed out that the Suspected Transactions Reports generated by the banks should also be monitored closely, under the laws. He said that central bank has also financial monitoring unit which should check Suspected Transactions Reports of banks. In case of abnormal activities in movement of currency, the regulator at once should become active, he added.
APBF SVP Imtiaz Rastgar said that SBP inspectors, under the rules, can visit the banks to monitor banks whether they are complying with the anti-money laundering laws or not.
Rastgar observed that central bank is unable to rescue the currency owing to its limited capacity amidst squeezing foreign exchange reserves. He said that the central bank is only taking some cosmetic steps to check free fall of local currency.
For more information, contact:
Umair Ali Khan
All Pakistan Business Forum
140 – Main Quaid-E-Azam Industrial Estates,
Kot Lakhpat, Lahore 54760
Phone: +92 42 35116465
Fax: +92 42 35115295
Tell: +92 307 7778234