LAHORE - The government itself damaged rupee by purchasing over $350 million through open market to enhance its foreign exchange reserves on the instructions of the IMF, throwing the rupee to its lowest level in the history.
“As we do not have a deep foreign exchange market the intervention in the local dollar market made rupee vulnerable,” observed noted financial expert Asad Umer and former CEO of Engro Group.
Addressing the members of Lahore Economic Journalists Association Asad Umer, who is also the PTI central leader as well as MNA, claimed that increase in the value of US dollar by Rs 7 has resulted in increasing country’s foreign debt by another Rs 500 billion. President LEJA Fakhir Malik and Secretary General Muhammad Luqman briefed Asad Umer about the activities of the association.
Asad Umer said that rupee was depreciated by Rs 7 in line with the pre-conditions set by International Monetary Fund (IMF) even before the conclusion of agreement. Asad Umar said that the government could have averted all the embarrassment by bringing the matter in the parliament before concluding agreement with IMF in an unprecedented haste.
He said that the government had managed to print currency notes worth Rs 800 billion during the last two and a half month in order to deal with the circular debt issue. Government should have sorted out the problem on permanent basis instead of going for cosmetic measures.
PTI central leader said that amount of Rs 1.4 trillion had been parked by influential Pakistanis in Swiss banks. Government was now able to retrieve the amount from the foreign banks in order to improve the financial health of the country.
He feared the inflation would double during the current fiscal year and another 1.2 million Pakistanis would be deprived of their right to earn their livelihood. He said that government was collecting most of the revenue through indirect taxes, putting all the burden on the middle class and the poor strata of the society. Asad Umar said, due to poor governance of the present government, the scams like Nandipur Power Project had started brewing up.
He said that the moment central bank intervened by pouring $60 million the rupee recouped its lost value. He said one fails to understand the logic of buying dollars from open market when after IMF agreement Pakistan was set to get additional inflows of $4 billion from ADB, World Bank and Islamic Development Bank. He wondered whether the economic managers of the PML-N are incompetent or they are bluffing the people. He said measures taken by them after coming to power clearly indicate a rough ride for the poor and a joyous life for the rich. “Why over 3 million tax evaders identified by Federal Board of Revenue have still not been nabbed” he wondered? He said the government has sparred immoveable property from taxes which account for over 90 percent of the hidden assets in Pakistan.
At least 1.2 million workers will lose their jobs if the IMF agreement is fully implemented” he said. He said IMF document shows that the growth rate this year would be 2.5 percent against the government projected rate of 4.5 percent of the GDP. Still he added Stock Market is making new records. He said those minting money should be asked to pay due taxes as well. He appealed the government to withdraw all exemptions. He said some exemptions granted to influential could singly generate over Rs500 billion rupees.
The present government is responsible for increase in power tariff and has failed to stop theft and corruption in power sector. He said government hopes to get Rs150 billion addition revenues after increase in power tariff. However he added the CM Punjab has recently said that power theft in the country is to the tune of Rs300 billion. “If Rs300 billion power theft is eliminated there would be no need to increase power theft” he said.