KARACHI: President Pakistan Businessmen and Intellectuals Forum (PBIF) and former provincial minister Mian Zahid Hussain on Monday expressed serious concern over steady dollarization of the economy.
This tendency of dollarization and increasing volume of black economy said to be at 65 percent of the GDP is against the national interests therefore government and central bank should stop it through policy measures, he said in a statement.
Hussain said that government imposed withholding tax on bank transaction due to falling exports and increasing trade gap which was not accepted by traders. Now traders across the country have acquired lockers and started business in US dollars ditching local unit which is not a good sign for the economy. The SBP has taken various steps to strengthen rupee including allowing exchange companies to import dollars which has not strengthened the local currency, he added.
Hussain said that the traders used to sell dollar at a profit of 20 to 50 paisa but the premium can jump to Rs 1.50 to Rs 2 which will discourage those sending over $18 billion per annum to Pakistan. Many of the overseas expatriates can prefer hundi over legal banking channels as their relatives have to pay WHT on the money which has already been taxed in foreign countries.
Zahid said that rupee was badly eroded in former government after which people started converting their savings in dollar which left commercial banks with more dollars than the central bank. The dollar should not be allowed to become alternate unit and underground economy which has swelled to 65 percent should be tackled.