Karachi, July 26, 2013 (PPI-OT): Karachi Chamber of Commerce and Industry’s President Muhammad Haroon Agar has expressed deep concern over recurring devaluation of the Pak Rupee against the Dollar terming it detrimental for the economy.
Haroon Agar said that the enhancement in the rupee dollar party is due to inefficiency of policy makers. The Rupee has plunged to life-time low position and will not attract the investors. Due to huge difference in the interbank exchange rates the expatriate Pakistanis would opt to other channels to send their remittances to Pakistan.
Haroon Agar said that our country cannot afford to have one of the worst-performing currencies in Asia which is result of deficits and lack of capital inflows, depletion of reserves, flight of capital, and failure to push through economic reforms. It appears that that policymakers lack a consistent plan to stabilize the currency which will compel business community to start looking at opportunities in other countries.
He said that almost over 50 percent depreciation of Pakistan rupee against US dollar since last five years and has nearly halted economic growth in the country, hitting all the important areas of economy from agriculture to industry; manufacturing to import of goods; and government should take immediate measures to seize further devaluation of rupee to avoid more damaging consequences for the economy. Rupee devaluation is multiplying the cost of doing business and badly affecting the industrial, manufacturing and agriculture sectors as Pakistan has to import commodities, machinery and industrial raw material.
He said though the weaker rupee may benefit to exporters by giving them more rupees per dollar, but this benefit is neutralized by the costly imported inputs of manufacturing sector including textiles thus eroding the financial advantage of a weaker rupee. Our economy is in slump as all sectors of economy are showing negative growth and further fall in value of rupee will cause more contraction in economic activity leading to reduced tax revenue for government and huge foreign debt.
He said that in the current scenario, depreciation of the rupee at its current pace won’t push up exports, rather will certainly inflate import bill and inflation that, over the years, became closely linked to the exchange rate because of Pakistan’s ever higher reliance on imports, particularly of energy inputs.
Faster the depreciation of the rupee, higher will be inflation and lower the competitiveness of Pakistan’s business and industry. Therefore, government should get quickly into action to control this damaging trend to bring stabilization in exchange rate to protect national economy from further injury.
For more information, contact:
Karachi Chamber of Commerce and Industry
Aiwan-e-Tijarat Road ,
Off: Shahrah-e-Liaquat ,Karachi-74000