Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Monday said food importers should be allowed to buy dollars from legal channels.
The government should take all the necessary steps to arrest the increase in the price of food items especially vegetables being imported from Afghanistan and Iran, he said.
Mian Zahid Hussain said that the government has instructed food importers to prefer barter trade, which is difficult, while the continuous depreciation of the rupee has made Afghan exporters unwilling to trade in rupees and are preferring dollars.
Talking to the business community, the veteran business leader said that due to the flood, there has been a shortage of tomatoes, onions, potatoes and other vegetables in the country, which are being imported from Afghanistan and Iran, while imports from India have not been allowed which is surprising.
He said that despite the shortage of vegetables in the country, importers are not allowed to buy dollars from banks or exchange companies and they are getting dollars from the open market which is increasing the size of this illegal market.
Mian Zahid Hussain further said that the dollar is strangling the rupee and some elements are taking advantage of the political chaos to smuggle dollars, which is weakening the economy.
Despite the shortage of dollars in the country, some banks are taking advantage of the opportunity and according to some currency dealers, banks are sending dollars out through credit cards, while some are buying dollars from the open market against which the central bank needs to act urgently.
The central bank may raise interest rates to reduce demand for dollars which will affect business activities while increasing unemployment and reducing productivity as well as revenue.
The dollar has pushed the euro and the yen to two-decade lows, while the British pound is at its lowest level in more than forty years.
The central banks have left with two options, either increase interest rates or throw dollars in the market to control depreciation.
However, Pakistan does not has the luxury to pump dollars into the market to dampen its demand.
As long as the interest rates in the US continue to rise, the dollar will continue to strengthen while all other currencies will erode.