Islamabad, In a statement released on Sunday, the former President of the Islamabad Chamber of Commerce and Industry (ICCI), Dr. Shahid Rasheed Butt, emphasized the importance of maintaining a balanced demand for dollars in the market to ensure stable exchange rates and boost market confidence.
According to Islamabad Chamber of Commerce and Industry, Dr. Butt highlighted the necessity of keeping the dollar's value steady to preserve the current balance between imports and exports, crucial for maintaining market stability and confidence.
Dr. Butt pointed out the adverse effects of fluctuations in the dollar's value on the import and export sector, leading to disturbances in the business environment. He explained that an expensive dollar worries exporters, while a cheaper dollar increases imports, exacerbating deficits and negatively impacting the business climate. He stressed that the depreciation of the dollar could lead to increased trade and current account deficits, which have been arduously controlled, noting the reduction of the seven-month current account deficit to one billion dollars.
With the federal government facing a debt servicing obligation of 24 billion dollars in the current fiscal year, Dr. Butt warned against taking any risks that could destabilize the financial balance. He addressed the challenges faced by exporters, including the high costs of electricity, a 300% increase in gas prices, an interest rate of up to 25%, and expensive fuel. Despite the government's proposal to reduce electricity costs for the export sector—a plan rejected by the IMF—finding alternative relief measures for exporters has become imperative.
Dr. Butt also mentioned that the government is expected to sign a staff-level agreement with the International Monetary Fund next week. This agreement would pave the way for Pakistan to receive the last tranche of $1.1 billion under the SBA Agreement. He noted the government's commitment to increasing the electricity tariff and implementing fuel adjustments for cost recovery, as well as the IMF's insistence on protecting beneficiaries of the BISP program and maintaining strict monetary policy and market exchange rates.