Islamabad: Amid criticism over devaluation, the government and the State Bank of Pakistan (SBP) on Friday revealed that current exchange rate has almost reached equilibrium and market conditions can clearly tell that.
During Senate Standing Committee on Finance and revenue, State Bank Pakistan Governor Tariq Bajwa reluctantly agreed to discuss the recent devaluation of rupee against the dollar.
SBP governor briefed that exchange rates partly depend upon the supply and demand in the market and the major reason was last year’s $19 billion financial deficit.
“Such a large gap had to be met from somewhere,” explained the governor. Either the central bank could have interfered to protect money devaluation or leave it on its own and let the market decide the value.
According to Bajwa, Pakistan’s current account deficit was majorly because of huge trade gap of $36bn (imports at about $60bn while exports at $24.5bn). This gap has to be removed and balance and this can only be done if we focus more on the exporting our products to the world outside.
zhar said the government targeted luxury imports through the bill and now they have signed a memorandum of Understanding between China