It has been decided to remove the cap (fixed limit) on the price of the dollar in the open market of Pakistan, after which its new value in the market is likely to exceed 250 rupees.
On Tuesday, the Exchange Companies Association of Pakistan announced the end of the cap on the dollar rate in the country.
According to economists, after the end of the ban on the dollar rate, the dollar will be available in the market, but the people will have to pay the price based on the new rate for everything bought with dollars, and inflation will increase further.
General Secretary of Exchange Companies of Pakistan Zafar Paracha told Urdu News that from Wednesday, dollar will be bought and sold in the country at the open market rate of more than 250 rupees. In the current situation, the benefit of keeping the dollar rate low is reaching the gray market.
He said that an important meeting of exchange companies has been held on Tuesday in view of the current economic situation in the country.
It was said in the meeting that in order to stop the rapidly growing gray market, all parties have unanimously decided to end the cap on the dollar rate so that the dollar going to the gray market is kept in the market.
He said that the decision to put a cap on the dollar rate was made in the country's interest, but the results were seen to be wrong.
"An artificial shortage of dollars was being created in the market and people were buying dollars from us at a lower rate and selling dollars at arbitrary prices in the gray market."
Khurram Hussain, an expert in economic affairs, says that it was necessary to remove the cap from the dollar rate. After this decision, the difference in the dollar rate is expected in the interbank market.
If the rate of the dollar will be better, people living abroad will also send dollars to the country in a legal way, which will improve the falling remittances, but it will also have negative effects and the public will have to bear the loss in case of inflation. will This effect will be seen when everything that is bought in dollars is sold in rupees.
He said that Pakistan imports many products including oil and gas. These products are paid for in dollars. And the increase in the dollar rate will increase the prices of all these products. The increase in the prices of petroleum products affects almost all sectors and the public has to bear the cost of inflation.
What is the cap on the dollar rate?
Zafar Paracha says that 'the cap on the dollar rate was a system introduced by the exchange companies through which the dollar rate was restricted to a level and the practice of speculation in the dollar was eliminated.' said that 'We had decided the cap on the dollar rate and we are also deciding to end it.'
Will the end of the cap system benefit the public?
Khurram Hussain said that removing the cap from the dollar rate will benefit the market but will harm the people. "Prices of all products, including oil and gas, bought with dollars will increase, which will directly affect the common man."
Finance Minister Ishaq Dar is in favor of this system to limit the dollar rate, but it has damaged the market. People have held dollars due to low rates and are not preferring to sell because the difference between the black market and the official rate is huge.
Abdul Azim, an expert in economic affairs, while talking to Urdu News, said that removing the cap system will harm the economy. This will benefit the black market.
A continuous decline in remittances is being seen in the country. If there is a big difference between the inter-bank and open market rates, people from foreign countries will send money outside of legal methods.
He further said that this will increase inflation and people will have to bear more burden of inflation in the coming days.
It should be remembered that due to the different rates of the dollar in the country at the moment, the interbank and open market as well as the gray market are also active.
According to money changers, the dollar rate in the interbank issued by the central bank is at Rs 230 and in the open market is at Rs 237, while the price of one US dollar in the gray market is between Rs 260 and Rs 265.
"Due to the huge difference of 30 rupees in the rate, the business of illegal currency operators is booming at the moment."
According to a senior officer of the Federal Investigation Agency, the FIA is continuing its crackdown against illegal currency traders in different cities of the country, but due to the involvement of many new people in this business. The FIA is also facing difficulties.
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