Many people with large savings or surplus incomes are looking for means to protect their wealth as purchasing power of the rupee falls, and multiply their savings, if possible.

And there is excess money in the market unable to find productive avenues in absence of an enabling environment. While policy makers are trying to get foreign money for balance of payments support, the country is also experiencing flight of capital. Investing in land is no longer profitable and is hazardous as well since the land prices have gone down on reduced demand. Investing in shares is unprofitable and risky.

Gold used to be a cushion for many but gold prices can come down as fast as they shoot up. Then there is risk from robbers who even loot bank lockers. It is no longer safe to keep big quantity of gold at home as the servants may grab a part of that.

Some middle income people used to keep their savings in dollars but the greenback has become too expensive, as its price has shot up from Rs60 to Rs79 within a short span of time.

Only the very rich can afford to invest in dollars earn more rupees.

But in the international market, given the global financial turmoil, neither dollar nor euro appear to be stable.

Many eye overseas investment but the shares of foreign firms have come tumbling down, in America in particular. Some invested in Dubai, buying property there, seeking residential facilities as well.

The number of visitors to Dubai has increased which has become a second home for them. But the Dubai’s real estate market has hit the saturation point.

Banks no longer offer the protection to savings/deposits against soaring inflation which, in the case of food has reached 34 per cent.

The NIT used to offer a hedge against inflation but now when share prices come tumbling down, its earnings will dip. Some think it safer to keep the money as cash in banks. The fact is due to high inflation, the rupee value of the deposits also drops. Sustained inflation is a lethal weapon which brings down everything.

The more money in the bank does not mean more protection as the money now can buy less and less as inflation eats into them. So people with the surplus income are buying more and more dollars and sending them abroad through the hawala system. The Hawala system which became weak after 9/11 has revived. Those who sent the money out argue that a weak dollar would one day be much stronger against the weakening rupee. The State Bank of Pakistan, Dr Shamshad Akhtar says that a weak rupee is a reflection of economic imbalances. The leadership has yet to assert itself , strengthen the economy and defend the rupee by reducing inflation.

Inflation, regarded as the number one enemy not only of the economy but of the country , particularly for the poor, should be fought resolutely and on a sustained basis.

Any indifference towards inflation can lead to very serious consequences. Protection of the rupee’s value should be regarded by the government as its major responsibility and the primary means to safeguard the economy.

A sinking rupee will take the economy down along with it and will have perilous consequences. Such an eventuality should be avoided at all costs.