ISLAMABAD: Economists have dubbed devaluation of rupee against dollar a preface to horrendous of inflation.
Monetary policy for the next two months will be announced today.
A remarkable decline in the value of rupees against dollar has posed threat of storm of price hike to engulf the country as it will lead to scale up the prices of petroleum products and the electricity tariff will also go up in the months of May and June.
The economic experts say that the amnesty scheme will be of no avail to the government. The people will have to keep themselves ready to face the formidable challenge of inflation in the next few months.
The ever falling exports and recurring loss to the farming community in agriculture field will have negative fallout on national economy.
This will trigger the threat of price hike denting further the purchasing power of the common man.
According to experts if the prices of petroleum products rise then on one side public transport fares will go up and on the other side the cost of old vehicles will fall.
The threat of increase in interest rate in the wake of devaluation of rupees will loom large.
New monetary policy will be announced for two months today through press release.
The central bank had enhanced interest rate by .25 percent after 20 months in previous monitory policy. The interest rate of central bank stands at 6 percent presently.
If the government succeeds in collecting Rs 350 billion under amnesty scheme then it will afford considerable benefit to the government in evolving next budget. If government fails to do so then threat of levying more taxes will remain there.
Pakistan stands at par with the smallest country of the world Cambodia in terms of foreign exchange reserves. The international institutions have expressed their grave concern over this state of affairs.
According to latest statistics released by statistical bureau food items were imported worth Rs 450 billion from July to February. On the other hand eatables valuing Rs 421 billion were imported during the corresponding period of previous fiscal year. Tea was imported valuing Rs 42 billion with the increase of 10 percent, cooking oil was imported costing Rs 143 billion with the increase by 16 percent and dry fruit was imported worth Rs 9.92 billion during 8 months.
The experts have said that Pakistan will have to become self sufficient at least in its food program to bring improvement in national economy. This will be possible only if a positive comprehensive policy is hammered out.