PESHAWAR, May 25: With the US dollar finding it difficult to be regarded as a reliable investment after Sept 11, bankers and businessmen believe that instead of investing the rupee proceeds of dollar encashments people are holding back their amounts to avoid risk, which has increased manifold due to escalating tension between India and Pakistan.

Investment in the manufacturing sector remained negligible in the post-Sept 11 scenario.

Not only that investment in the productive sector remained at the lowest ebb during the last eight months, banking sector also adopted a much more careful attitude in issuing new loans.

“Except for five or six CNG stations, which were provided funding facility by the Bank of Khyber recently, the NWFP private sector remained lacklustre as far as investment in the post-Sept 11 situation is concerned,” said a senior officer of a bank.

The real estate business in NWFP, too, could not remain aloof of the recessionary trends, which got aggravated further in the post-Sept 11 situation.

Voluntary repatriation of the Afghan refugees and Afghans, who were living illegally in the posh localities of Peshawar and other urban centres of the province, further added to the problems of the businessmen dealing in the real estate business.

“Real estate’s prices and even rental value of residential accommodations got down to such an extent after the Sept 11 and further aggravated by the repatriation of Afghans,” said a property dealer.

Former president of Sarhad Chamber of Commerce and Industry, Jamshed Sawal said that money proceeds of the dollar encashment most probably went to the stock exchange keeping in view the recent index trends recorded by the Karachi Stock Exchange — before crippling down two days back.

“There is certainly a co-relation between increase in instances of people getting their dollars’ encashed due to its dwindling health and improvement experienced by the stock market before being crashed couple of days back,” said Jamshed, who is also representing the NWFP’s private sector on the board of directors of Bank of Khyber.

Bankers said that the bank deposits — in the public or private sector — also did not record unusual growth in the post-Sept 11 situation, though greater number of people (foreign currency account holders) opted to encash their dollars.

He appeared convinced that amidst declining real estate prices, more instances of encashment of dollars and negligible investment in the manufacturing sector in the post-Sept 11 situation, people are either holding their money back at their houses in the shape of cash or bonds.

Similarly, the banking sector, too, appeared to be more inclined to invest in safer investment schemes, including treasury bills, federal bonds, etc., instead of taking risks to provide liquidity in these risky days when clouds of war are also hovering over the investment climate in the NWFP, sources added.