The Economic Advisory Council (EAC) has called on Prime Minister Shehbaz Sharif to take measures to ease pressure on the local exchange rate and maintain export competitiveness. During a recent meeting, members of the council expressed concerns over the rupee’s valuation and its impact on the country’s export sector.

Some EAC members highlighted the Real Effective Exchange Rate (REER) of 104.05 for January, indicating that the rupee is overvalued by 4%. They warned that this overvaluation is eroding export competitiveness. However, Foreign Minister Ishaq Dar disagreed, asserting that the rupee is undervalued by at least 15%.

Exporters Raise Concerns

Exporters in the council emphasized that the rupee’s overvaluation is making Pakistani goods less competitive in international markets. Meanwhile, data from the State Bank of Pakistan (SBP) revealed that foreign exchange reserves had dropped by $1 billion, standing at $11 billion as of last week.

Import Restrictions and Suggestions

The meeting also addressed easing import restrictions to support industries. The central bank confirmed that duty-free imports of cotton, textile machinery, and raw materials are already allowed. Some EAC members proposed permitting raw sugar imports for refining and re-export, while others urged the government to remove sales tax on imported raw materials to reduce production costs.

PM’s Directives

Prime Minister Shehbaz Sharif directed the relevant authorities to collaborate with the EAC to develop a comprehensive strategy to address these issues. The strategy is expected to focus on stabilizing the exchange rate, supporting exporters, and ensuring the availability of essential raw materials for industries.

The discussions underscore the government’s efforts to balance exchange rate management, export competitiveness, and industrial growth amid economic challenges.