As the Pakistani rupee gained massively against the US dollar, interim Information Minister Murtaza Solangi hinted at the reduction in the petrol price in the next fortnight’s review — scheduled for September 30.
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Speaking to the media at the Karachi Press Club on Saturday, the information minister responded to the news report saying that the Pakistani rupee has gained around Rs30 to Rs35 against the greenback due to administrative measures taken by the interim government in the last few days.
The Information Minister was referring to the crackdown launched by the authorities against hoarders, currency smugglers, and black marketeers after the rupee fell to a historic low of Rs308 in interbank and beyond Rs330 in the open market earlier this month.
Potential Petrol Price Reduction
The crackdown has helped the rupee gain significantly, recovering to 291.76 per dollar in the interbank market, its highest level since Sept 5.
The Pakistani rupee has gained 5% or Rs15 since then, supported by dollar inflows from exporters and remittances, as well as measures by the central bank to encourage legal channels for foreign exchange transactions.
“There are enough chances that the petrol price will be reduced in the next [petrol price] announcement,” the information minister told the media adding that the interim government has no role in fuel prices as they are linked with international petrol price.
Petrol Price Increase To All-Time High
In the last fortnight review on Sept 16, the fuel prices reached a historic high after the caretaker government increased the petrol price by more than Rs26 and diesel price by over Rs17 per litre, after the increase of prices in the international market.
Currently, petrol price is at Rs331.1 per litre while high-speed diesel is available at Rs329.19 per litre.
Rupee likely to recover to 250
Earlier this week, Malik Bostan, the Chairman of the Exchange Companies Association of Pakistan (ECAP), shared some encouraging news about the country’s remittance situation. He’s feeling quite optimistic, and here’s why: The government has been taking strong measures to crack down on individuals and groups involved in hoarding, black market trading, and smuggling of dollars.
In simpler terms, they’re trying to put a stop to those who are involved in shady financial activities. Malik Bostan believes that these efforts will have a positive impact on the amount of money sent back to Pakistan by its overseas citizens. He’s even estimating that remittances could increase by somewhere between 10% to 20%.
So, what’s the reasoning behind this hopeful outlook? Well, it’s all about trust. When the government takes action to clean up the financial system, it becomes more reliable and transparent. This, in turn, makes people abroad more confident in sending money back home through legitimate channels.
When remittances go up, it’s not just good news for the government; it’s good for the whole country.
These remittances help Pakistan build up its foreign exchange reserves, and keep the value of its currency steady, and most importantly, these remittances support countless families who depend on these funds for their daily needs and dreams.
In a nutshell, Malik Bostan’s optimism is based on the belief that Pakistan’s crackdown on financial wrongdoing will make it easier and safer for people to send money back home, ultimately giving the country’s economy a boost.
Rates Dips Down
Talking to The News, the Minister said because of the crackdown the foreign exchange companies, which earlier used to get around $5 million per day, are now getting $15 million per day i.e., a 200% increase. For the same reason, he said the interbank and open market dollar rate has considerably come down, due to these crackdowns.
He assured if the crackdown will be continued, the dollar would come down to below Rs250.
The Minister disclosed the crackdown against hoarders, black marketeers and smugglers of dollars has also exposed a nexus between black marketeers and banking staff.
Huge amount of dollars, he said, was stashed in lockers of different banks, and the bank staff in coordination with the black marketers, used these dollars for hawala/hundi.
Keys of these lockers were with the corrupt bank staff members, Bostan said, adding upon receiving messages from black marketers concerned, they (bankers) used to do the illegal trading of US dollars.