ISLAMABAD – Pakistan Finance Minister Asad Umar defends the devaluation ofPakistani Rupee against US dollar for long term effects.
Asad Umar said the last government had maintained the rupee-dollar parityartificially by purchasing the greenback from the open market, whichresulted in reduction of prices of imported items whereas the localproducts got more costly.
The local industry started closing due to being non-competitive in theinternational market, he said, adding that no structural reforms wereundertaken by the last regime to stabilize the economy, causing continuousrupee depreciation. “We will have to increase our exports, decreaseimports, raise foreign direct investment, and increase investment inproductivity-oriented
institutions in order to contain the hike in dollar value,” the ministersaid, adding that decrease in the rupee value has affected the country’seconomy for the time being but it will have long-term positive impacts.
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“Due to artificially contained value of rupee, our agriculture andindustrial sector had also been badly affected,” he said.
“Despite surplus produce of wheat, rice and sugarcane, the commoditiescould not be exported due to their lower prices in international markets,”he said, adding that the imported commodities were subsidized by the lastregime which discouraged the local industry and negative growth wasparticularly recorded in large scale manufacturing industry that forced theindustrialists to shut down their businesses rendering about 500,000 peoplejobless.
