Army Chief Commits To Stabilize Currency Crisis
The Pakistan rupee is currently in a sharp decline, causing significant economic repercussions, especially given the already high inflation rates affecting everyone in the country. Chief of Army Staff Gen Asim Munir has made a commitment to enhance transparency in exchange rates and to bring currency exchanges within the taxation framework.
This statement carries substantial importance due to the widening gap between the official exchange rate of the Pakistan rupee and the US dollar, particularly in the open and black markets. Gen Asim expressed these views during a meeting with the business community at the Corps Headquarters in Lahore, where they discussed various economic issues and their implications.
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Gen Asim stated, ‘Money exchanges will be subject to taxation, promoting transparency in dollar exchange and interbank rates.’ It’s crucial to consider that the IMF’s requirement for the market to determine the exchange rate has contributed to the rupee’s depreciation, which led to this promise by the army chief following the delegation’s call for increased control over the money market.
Gen Asim also emphasized the significant role of the Special Investment Facilitation Council (SIFC), which has the potential to attract $100 billion in investments from countries like Saudi Arabia, the UAE, Kuwait, and others. He also revealed the establishment of task forces dedicated to economic matters and various sectors to enhance the decision-making process.
In response to the demands put forth by businessmen, they proposed a reduction in income and sales tax rates on electricity bills, which have placed a heavy burden on both ordinary consumers and businesses. They also recommended a ‘pragmatic approach’ to fuel adjustment charges, suggesting their collection during the winter months when electricity consumption is lower to ease financial strain on consumers.
Furthermore, they called for a unified commitment from political parties, suggesting the signing of a ‘charter of economy’ as a prerequisite before upcoming elections. Regarding Gen Asim’s earlier comments on the existence of a sizable grey economy, which is reportedly much larger than the documented economy, they recommended providing incentives for the grey economy sector to transition into the formal economy. They cautioned that expanding the tax base would remain challenging as long as the grey economy remains unincorporated.