DRAP urges govt to trade in yuan

The Drug Regulatory Authority of Pakistan (DRAP), on Friday, urged the government to strike import deals, especially for raw material required for the production of drugs and medical devices, in Chinese currency (RMB) to avoid potential interruptions in the country’s production of pharmaceuticals.

During a meeting with the Pakistan Pharmaceutical Manufacturers’ Association (PPMA), DRAP Chief Executive Office Asim Rauf explained that the measure will help mitigate any disruptions caused by the shortage of dollars in the country.

“In light of the drastic measures being taken against imports by the government, DRAP recommends trading in Chinese currency otherwise pharmaceutical production in the country will come to a halt,” warned Rauf.

Talking to The Express Tribune, Arif Habib Commodities CEO Ahsan Mehanti said, “Pakistan is facing an unprecedented forex exchange crisis. The unavailability of forex, at a time when our reserves are at a record low at $3.7 billion, will lead to production losses.”

“RMB can be supplied by the Chinese government against an arrangement made by DRAP,” he said, adding that Russia made similar arrangements with China against the supply of oil and Pakistan too could strike such deals with both Russia and China to pay for imports.

Lasbela Chamber of Commerce and Industry President Ismail Suttar was of the opinion that the issue of arranging the currency will be the same as seen with the dollars, “But, it is always better to have more options,” he said.

“Instead of firefighting, however, we should isolate a team tasked with achieving one long term goal: increase the basket of products and exports through these new products,” he said, adding that, “That is the need of the hour. An industrial emergency also needs to be in place with utilities being subsidised for the industry.”

“Once Pakistan’s mineral resources are converted into valuable chemicals, the country will easily be able to sort out the current issue of balance of payment (BOP). This will also make the usage of dollars or RMB, or any other currency irrelevant,” said Suttar.

President of Korangi Association of Trade and Industry (KATI) Farazur Rehman agreed that the solutions must be long-termed.

“Decision-making in war and peace situations requires different approaches. As we currently lack foreign currency, any arrangements that can be made to address this are welcome. However, it is important for the government to also consider long-term solutions,” said Rehman.

Published in The Express Tribune, January 28^th, 2023.

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