KARACHI: Pakistan Businesses Forum (PBF) on Saturday stated that rupee is further weakening despite improved exports and remittances, one must understand stable foreign exchange rate helps stimulate long-term fixed investment while a prolonged, abnormally fluctuating value of the national currency tends to distort the financial viability of projects with longer gestation periods.
Vice President PBF, Ahmad Jawad, told media that PKR currency had lost 50% of its value since December 2017 till date and if the country is already experiencing economic problems such as higher inflation or unemployment, floating exchange rates may make the situation worse. The depreciation of the currency may further drive the inflation rate higher, he added.
Jawad said even market based floating exchange rate leads to unnecessary movement of capital inflows and outflows which can severally damage an economy that has sound fundamentals. Free float of rupee will further fuel inflation, he said.
It’s now a open secret globally that IMF Program reduces economic growth, and deepen and prolong financial crises, creating severe hardships for the poorest people in borrowing countries, because IMF policy prescriptions provide uniform remedies that are not adequately tailored to each country.