President, Employers’ Federation of Pakistan(EFP), Ismail Suttar was disappointed by the central bank’s decision to run amok in their foreign exchange regulations without considering the repercussions of implementation.
In a statement, the EFP president said that the State Bank had very recently announced a policy, which requires the exporters to bring back foreign proceeds in a maximum of 120 days in contrast to a 180-day policy previously, on the basis that such initiatives will help smooth out cash inflow in the country. But apparently one cannot begin to argue the ignorance of barrier, this policy imposes on the exports of the already backlashed economy of Pakistan.
He said that considering the ever increasing inflation rate at 10.74%, exchange rates at $1 equal to 176.83 PKR and balance of trade deficit at $5.11 billion, we could all agree that exports were the strategically practical way out. It is a well-known fact that one should focus on and make the maneuvers of exports easier in contrast to more restricted, volatile and unfeasible for the country
“EFP adheres to the belief that the restriction of the foreign exchange policy in this regard, will be an unwanted repercussion for the economy of Pakistan, ultimately decelerating the export growth of the country”, he said, adding that a simple deliberation on the matter, can lead us to realize that the Central Bank’s action to afore the export proceeds might prove to be something quite opposite to the advantage expected since a drastic decrease in the dates so suddenly might bring Pakistan closer to the norm internationally but it will be equivalent to jumping too many step at once.
Therefore, it is essential for the central bank to understand that despite their defense in the matter, a 60 days’ reduction in the foreign policy will be too large of a change in one instance. “Even as per the business community the State Bank should consider bringing the deadline for recovering export proceedings back to 180 days, that is when things normalize. As always, the consideration and analysis of important entities in this regard will play a very vital role in the establishment of sustainable systems that will build the trust of business communities in the region to foster growth and development on their end”, he added.