ISLAMABAD, Sept 27: The Government should introduce a separate exchange rate for exports in a situation of possible sharp appreciation of the exchange rate of rupee with a view to saving exporters from loss, to the eventual detriment of balance of payments.

This was proposed by an economic researcher at the Pakistan Institute of Development Economics (PIDE), Mr Ali Kemal here on Saturday. Dr Naushin, Joint Director, PIDE, was in the chair.

Since September 2001, the exchange rate has declined from Rs64 to around Rs58 to a US dollar due to high inflow of foreign exchange in the shape of remittances, etc., which, the author argued, might adversely affect the exports and worsen the trade balance.

The main problem stems from the uncertainty that the exchange rate instability might create, thus adversely affecting the domestic currency earnings of exporters, he apprehended.

He answered in the affirmative when asked by this scribe whether a special exchange rate for exports might amount to export subsidy. His objective, he added, was to safeguard the exports in view of their multifarious value for not only imports but also the overall economy.

In case, it was not considered feasible to determine a separate exchange rate for all the exports, then it could be contemplated in respect of only certain category of items, Kemal added.