News update – 12th march 2020 According to the recent statement of the currency of Pakistan which cannot be stabilized in the long run on borrowed money. While real stabilization would come only when we are able to increase our exports to or near the import level. Contemporary plotted rupee stability would crash without an upsurge in exports.
While the management and the central bank are still in firefighting means as they have taken no tangible step to boost exports and ensure prolific utilization of the huge transmittals. In statistics, the state cannot afford to let the payments coming in expended in the import of technology.
While some of the recent reports of the textile exports shows of $ 13 billion are $ 9 billion less than what the workforces send per annum to Pakistan. These payments are corresponding to 75 percent of our total distributes. Most of these payments are wasted in ingesting. Even if 20 percent of these transmittals are geared toward manufacturing investment it would be two times higher than the foreign direct investment that we yearly receive.
In addition, the depositors have no clue how to move in this regard. They might get development loans at a funded mark-up, but they would be getting occupied capital to service both development loans and working wealth at least for five years. That would be an uphill task for businesspersons.
Some seniors recommended that bringing down the policy rate could lure in new investment, but the predicament is that a single-digit policy rate could discourage foreign fund managers, who would lose curiosity in the treasury bills and billions of dollars inserted into these bills would be disinvested.
The State Bank administrator has always been talking about the sustainability of growth. Current central bank policies are not any encouraging sustainable growth but are making the economy dependent on the regular influx of high-cost hot money.
The stability of rupee from on loan money is not maintainable. We will have to loosen our financial policy to deliver conscious space to the investors, who have been strangled by the high-interest rates.
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