In the aftermath of recent talks with the visiting officials of the International Monetary Fund, the government has allowed devaluation of the local currency, but opened the floodgates of inflation, mismanagement and financial crisis. Since the government showed its leniency toward devaluation, the rupee has been sliding for the fourth consecutive day in the inter-bank market as it reached at an all-time low to close at Rs 11.5 to a US dollar. The rupee has shed at least five percent of its value in the open market where it closed at Rs 112. The financial experts and senior bankers opine the State Bank will have to come to the rescue of the rupee without ifs and buts; otherwise it could go as low as Rs 120 a dollar in weeks.
The nation is already bearing the brunt of low economic progress, financial constraints, rising tax rates and hidden inflation. The writ of the government is invisible in the markets of consumer items and edibles and everyone is trying to wash hands in the running rivers of corruption and profiteering. The strategy to lower the value of rupees always met with failures in the past and the current policy will also meet the same fate. The government had not been tired of declaring that it would not seek another bailout package from the IMF, but the current measures show that the nation is going to be mortgaged again to the foreign financial institutions. It is hard to understand why the governments in Pakistan always prefer shortcuts or are fond of makeshift arrangements to resolve serious issues. A small shop needs management, but the government either lacks vision and capacity to take solid steps for the resolution of the problems.
In a country where the writ of the government is week and corruption is rampant, these kinds of ventures plunge the country into further chaos. It is absolutely unfair to deprive the value of the people’s earnings overnight without any warning. It is unfortunate the policymakers, who are drawing hefty salaries and perks at the cost of taxpayers’ money, have no capacity to manage economic or financial affairs. To cull the rupee value means to cull the economy as all the gains of macroeconomics are going to be lost in coming months with injudicious decision of devaluation. The people of Pakistan are already facing all kind of troubles and the government, with its latest move, has added insult to injury.