Dollar Rate in Pakistan Headed Below Rs250? Malik Bostan Makes Bold Prediction

The Dollar rate in Pakistan could fall below Rs250 in the coming days if current economic trends continue, according to Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan.

Speaking on the foreign exchange market situation in the country, Malik Bostan said the situation has been stabilised due to increased remittance inflows and persistent efforts were underway to crack down on illegal hawala and hundi networks. Given the developments, he said that the USD to PKR exchange rate may fall below Rs250 if the current trend persists.

Remittances Helped Strengthen Pakistan’s Foreign Exchange Position

Over the years, the Pakistan Remittance Initiative (PRI) has been instrumental in improving the official remittances, said Malik Bostan. He said the growth in remittance income from $9 billion annually to $41 billion has helped boost Pakistan’s foreign exchange reserves and the rupee.

He said that the government was not taking any fees on remittance transactions under the PRI scheme. Instead, it offered financial incentives to overseas exchange companies by paying a fee, around $50, from the national treasury to incentivize remittances via formal banking channels.

IMF Condition Led to PRI Scheme Closure

The chairman of the ECAP has informed that the International Monetary Fund (IMF) had demanded Pakistan to stop the PRI scheme as part of its reforms. The State Bank of Pakistan has come up with a plan to phase out this initiative after this requirement.

Malik Bostan concluded that instead of scrapping the program altogether, the government should have launched some reforms to make it more efficient and continue to offer incentives for Pakistanis living in foreign countries to transfer money through legal avenues.

Concern Over Future Remittance Growth

Malik Bostan, however, expressed concern about the move, saying that it may deter people to use the official channels for remittance inflows and affect future growth of remittances.

He, however, expressed optimism over the continued flow of remittances, as almost 15 million Pakistani nationals are working abroad and bringing in money to the country.

Dollar Price in Pakistan Could Decline Further

The government’s efforts to curb illegal hawala and hundi activities have also helped to strengthen the foreign exchange market, Malik Bostan added. These steps, together with the remittance inflows and the stable economic scenario, may help bring the Dollar price in Pakistan below Rs250 in the near future, he added.

Outlook

The prediction reflects the views of the ECAP chairman and should not be considered an official forecast by the State Bank of Pakistan or the Government of Pakistan. Several factors will influence future movements of the Dollar rate in Pakistan such as foreign exchange reserves, import demand, remittance flows, inflation, monetary policy, and general economic conditions.