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Prices may soar due to new exchange rate

Author : | Published: Wednesday, December 16, 2015

An economic analyst says he expects commodity prices to rise six-fold with the new official exchange unless they are subsidized by the government.

The official rate of dollar against pound which was at 2.96 now sells at 18.5 pounds.

According to economist Ahmed Morjan, the pound has lost its value against the dollar by a big margin.

“Now my concern is on market commodities like fuel. We know that the government set the price at six dollars per litter and that one would be like two dollars,” Mr Morjan told the Dawn Show.

“But now with the free float then you will expect price to increase, for instance now this would mean the price of fuel is supposed to increase to about thirty seven pounds per litter.”

He believes subsidies would help arrest the economic situation.

However, in a statement on Tuesday, the Finance and Economic planning minister, Deng Athorbei, said the value of foreign currencies against the pounds will now be determined by the overall market demand.

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