ISLAMABAD- Pakistan's public debt, in rupee terms, has increased by more than Rs 740 billion in less than half an year due to devaluation of the local currency against the US dollar. Pak Rupee shed its value by more than a fifth against the US dollar during the last few months. Pakistan's total public debt reached US $ 46.3 billion by end June, 2008. A Finance Ministry official told TheNation that every single rupee decline in the value of Pakistan currency against the US dollar was adding up to an amount of Rs 46.3 billion in its public debt. Though Pakistan's foreign debt is denominated in dollars, the decline in the local currency's value against the American currency is pulling more domestic resources to pay off huge foreign liabilities. According to Economic Survey of Pakistan, in July 2007, every US dollar was equal to 60.4 Pak rupees. In March 2008, the rupee fell down to 62.5 against one US dollar. It took a deep dip after March and traded at Rs 69 in June 2008. During first week of July, one US dollar was traded above Rs 70 in the open market. On Friday dollar reached to the peak of Rs 76.35 in the open market. The economic experts see expensive imports, decline in foreign investment, less exports than imports, fast decline in the central bank foreign exchange reserves and highly speculative exchange market as the main reasons of falling Pak rupee against the US dollar.   Dr Kaiser Bengali, an economist, said due to inflationary expectations people were going towards dollarization, preferring American currency over Pak rupee. He suggested to take long term measures, rationalization of imports and shifting of goods transportation from roads to railways, which would reduce oil import.   A Finance Ministry official said that this time the State Bank of Pakistan, which in the past supported the falling rupee by throwing dollars in the market, was not in a position to hold up the local currency. "The central bank does not have enough reserves of US dollars to throw into the market, especially when the foreign investment, which is the major source of foreign currency earning, is declining", he added. In October 2007, the foreign exchange reserves with the central bank stood at US $ 16.4 billion that declined to below US $ 10 billion. The central bank yesterday reported foreign exchange reserves at US $ 9.92 billion, out of which US $ three billion are lying with the commercial banks. The SBP Chief Spokesman Syed Wasimuddin declined to comment when he was asked "what the SBP was doing, in its capacity of being a regulator, against the depreciating Pak rupee, as it used to do in the past". A source in the Finance Division said whatever the reason of declining Pak currency might be, the worrisome element was that the people were going towards dollarization, preferring the US currency to the local currency.      People have started speculating that the reserves with the SBP cannot support local currency any more and the value of the US dollar would increase further, which is better option to earn money on the foreign currency, he added.   Pak rupee shed its value by more than 20 per cent and if people started estimating annual loss of even at 10 per cent then they would prefer to save and keep dollars over Pak rupee. The source said that it was no more a problem exclusively addressed by the SBP, as it was the question to be solved by the whole economic management. "If the government wants to stem Pak rupee over the dollar, it has to first give confidence to the market and spell out prudent macroeconomic management with a farsighted economic policy", he added.   Former Minister of State for Finance, Omar Ayub said the government inaction was pushing people to keep dollar over the local currency because they did not know where the economic situation was heading. He said the economic managers should give a confidence to the market and bring a political stability in the country. The former Deputy Finance Minster predicted dollar in the open market would go to Rs 84 during next couple of months.