As the government’s amnesty for construction sector expired on 30th June, US Dollar reached the highest it has been in last 8 & a half months reportedly trading at 161.5 rupees.
Country’s domestic economy had seen an influx of dollars after government announced amnesty scheme for construction sector. Large sums of dollars were being poured in every day as people looking to whiten their money exchanged their dollars for rupees to buy real estate in order to whiten their money. Supply for dollars decreased significantly weakening the already devalued rupee.
Current government’s focus on real estate & construction saw the sectors attracting huge amounts of new investments. A large number of new companies were registered during the FY 2020-21 along with a number of existing companies expanding their portfolios & increasing their market cap. Overseas Pakistanis, sensing an opportunity, also started sending large sums of foreign exchange accelerating the market further.
Experts have expressed their concerns stating that this state of affairs will have a significant negative effect on the market. Investors’ morale need to be boosted with new government reassurance as many fortunes are at stake.
According to SECP chairman Mr. Zafar Paracha, the price of dollar could reach Rs. 165. He stated that the government has reached an agreement with IMF to devaluate rupee, a move that will shift country’s exports in it’s favor. Meanwhile, a large amount was recently paid for oil imports. In August last year, dollar had reached the record level of 168.5 rupees. An early decision by the government to extend amnesty will put the investors’ trust & dollars back in the market.