“We will practice austerity and financially stronger people must lead in this effort so that the less privileged among us do not have to bear this burden inflicted on them by the PTI government,” the prime minister tweeted, adding that the nation would overcome these challenges with “resolve and determination”. The decision comes as the dollar has witnessed a meteoric rise against the rupee over the past few weeks on account of the country’s rising import bill, growing current account deficit and depleting foreign exchange reserves, Pakistan’s Dawn newspaper reported.
The dollar on Thursday, shattering all records, soared to Rs 200 in the interbank market.
The information minister during a press conference assured the nation that the Pakistan Muslim League-Nawaz (PML-N) premier was “working day and night to stabilise the economy”. Aurangzeb said the banned items included cars, phones, dry fruits, home appliances, weapons, frozen meat, fruits, furniture, make-up, shampoos, cigarettes, and musical instruments that were not used by the general public.
Citing an “emergency situation”, the minister said Pakistanis will have to make sacrifices under the economic plan, and that the impact of the banned items would be around USD 6 billion. “We will have to reduce our dependence on imports,” she stressed, adding that the government was now focusing on exports.
The minister said that under the government’s economic plan, local industries would prosper while employment opportunities would also arise. Criticising the PTI led former government, the PML-N minister said the cricketer-turned-politician Imran Khan had put all the cases against his own regime on the backburner.
Terming it “economic terrorism”, the minister held the PTI government responsible for the exponential rise in inflation. “He promised an unfunded [fuel] subsidy and played with the economy. He tried to trap the incoming government,” she claimed, adding that Imran was woefully unaware of the country’s economic problems. “We have the capacity and experience to fix the current economic issues. The step taken to ban imported items is aimed at stabilising the economy,” she added.
PTI leader Hammad Azhar, however, questioned the government’s move, arguing that these items only made up a small percentage of the country’s import bill. “Millions of traders and shopkeepers will be affected by these steps and it will also have an effect on bilateral trade,” he tweeting, adding that the move would lead to a rise in smuggling. “Non-oil current account deficit stands at just under USD 1 billion. These measures to ban items will be inconsequential,” he predicted.
The curbs on non-essential imports came as Pakistani officials and the representatives of the International Monetary Fund commenced talks in Doha on Wednesday for revival of the stalled USD 6 billion Extended Fund Facility (EFF) programme. Its revival has been termed crucial for Pakistan’s cash-strapped economy, which has seen its foreign exchange reserves plummet in recent weeks amid import payments and debt servicing.
Foreign exchange reserves held by Pakistan’s central bank decreased another USD 190 million to USD 10.31 billion last week, lowest since June 2020, with the level staying at less than 1.5 months of import cover. With the dollar rising to uncharted heights, stakeholders warn that a weakening rupee could open up Pakistanis to a second round of inflationary impact, which will hit the lower and middle classes the hardest.
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