The policymakers in this country are in the habit of making and breaking decisions on important issues. They take a decision enthusiastically only to reverse it after sometime, leaving a mess of confusion at the end. The State Bank of Pakistan entered the new year by gifting the nation with depreciation of the Pakistani rupee. The bank also restricted the import of cash dollar to 35 percent, creating a shortage of the greenback in open markets of the country. However, the restrictions, applied on January 1 were lifted in 10 days and the bank allowed dealers to import 100 percent cash dollar against the export of other foreign currencies. Earlier, the bank had allowed only five percent devaluation, but the rupee vs dollar exchange rate surged to a record high of Rs113 from Rs110.80 in 10 days. Now the mighty organization of the country is beseeching the private dealers to help bring down dollar rate in the open market. A stable currency brings stability to the economy, but once it is allowed to melt, no one can help stop the economy from a free fall. Those who decided to curtail the value of the rupee owe explanation to the nation.
Meanwhile, the currency dealers are unhappy over the involvement of banks in the currency import, but not all the dealers are on one page. There are the currency traders who support the State Bank’s initiatives to restrict the dollar import to 35 percent, but others fear the controlled import of dollar would create a shortage of the powerful currency in the open market. It is yet to be seen how the dealers will help the central bank bring down the dollar value to the desired level. In the past, once the rupee crossed a barrier, the government agencies failed to keep it at the level of their choice. According to reports, no circular has been issued to allow 100 percent import of cash dollar and lift the condition of 35 percent, but an official of the Forex Association of Pakistan claimed the central bank allowed them to import 100 percent dollars from Dubai. Experts believe the US threats to Pakistan are pushing up the dollar rate in the country. However, political uncertainty and daily protests for one reason or the other are also affecting the currency market. Stabilizing the rupee value is a challenge for the current government.