Islamabad:
The Economic Advisory Council (EAC) raised concerns on the exchange rate pressure on Wednesday, which also reflected in the Central Bank data, urging Prime Minister Shehbaz Sharif to examine the issue to keep competitive exports.
During a meeting, some members of the council of nine members underlined the actual actual exchange rate (RRSP) – a measure of the value of a currency compared to the average price of foreign currencies – which increased to 104.05 in January 2025.
According to the officials, this indicated that the roupie was overvalued by 4%, because RRSP 100 was considered that the roupine was negotiated at a fair market value and any higher or lower movement than this threshold meant that the price did not reflect the real conditions economic.
However, the Darrier and Minister of Foreign Affairs Ishaq Dar differs with RRSP and estimates that the rupee has been undervalued at least 15%. Currently, the rupee is negotiated above RS279 to a dollar in recent days and remains stable for a longer period.
The EAC, led by the Prime Minister, includes Jehangir Khan Tareen, Saqib Shirazi, Shehzad Saleem, Musaddiq Zulkarnain, Dr Ejaz Nabi, Asif Peer, Ziad Bashir and Salman Ahmed as members.
The officials said that the members of the EAC, some of them, were of the opinion that due to the overcass of the rupee, their exports became non -competitive, adding that the Minister of Finance Muhammad Aurangzeb assured to The EAC that he would take the question with the State Bank of Pakistan (SBP) – The regulator of the exchange rate regime.
Some EAC members also seemed to protect their own commercial interests at a meeting, raising certain micro-level issues, which should not have been raised for the discussion, observed a participant in the meeting.
EAC members stressed that exchange reserves had also started to drop and dropped $ 1 billion to $ 11 billion by the end of last week.
Pakistan exchange reserves remain low despite the IMF program, as there is no major increase in fresh foreign entrances. The central bank maintained the reserves by buying dollars on the market. Purchases amounted to $ 9 billion in the past year.
However, limited windows were available for purchases in January after the country recorded the current account deficit of $ 420 million. The SBP buys dollars while retaining part of the export procedure and sending foreign funds.
The Central Bank says that the import restrictions have been deleted and have enabled the imports of a franchise duties to fill the gap between demand and domestic supply. There is also the import authorization in deductible for textile machines and spare parts; And raw materials are not produced locally.
Overall, the current account posted an surplus of $ 700 million in the first seven months of this financial year of $ 19.2 billion in exports. Some EAC members have also recommended to import raw sugar in order to re -export it after refining the goods.
A member, having issues in the export sector, recommended that the government cannot impose any imported raw materials sales tax. Exporters use abusive installations after the government has imposed the sales tax on the facilitation of exports.
The Prime Minister also underlined the efforts to make local industries capable of participating in international markets with their exports, according to a press release. The Prime Minister stressed that consultations were underway concerning the regulation of digital currencies.
EAC members also considered that the investment would only stimulate after improving the overall investment environment and that local investors also started to invest, according to the participants of the meeting.
An official document from the Prime Minister’s office said that CAE members have noted their confidence in government economic policies and had presented key suggestions to further strengthen Pakistan’s economic growth.
He added that Shehbaz asked the competent authorities to collaborate with the members of the Council to form a complete action plan based on these suggestions. He stressed that economic stability was not the result of an individual effort but the collective efforts of the whole team.
The Prime Minister also underlined the need to use the regional commercial potential. He said that industry, agriculture, the development of information technology, job creation and the increase in exports were among the main priorities of the government.
The Prime Minister said that efforts were underway to improve telecommunications services and provide Internet access to distant regions, which would help increase the number of freelancers and exports of information technology (IT).
