LAHORE: The Lahore Chamber of Commerce and Industry has urged the government to direct the Ministry of Finance as well as the State Bank of Pakistan to immediately intervene in the matter of rupee devaluation as it is bound to hit all sectors of the economy.
In a statement on Tuesday, LCCI President Almas Hyder said the government should start immediate consultation with the stakeholders as increase in dollar value would not only cripple the country’s economy and trade, but would also affect the lives of the already struggling masses.
He said that massive devaluation of rupee will reignite record inflation and halt growth, adding that the higher value of the dollar will lead to an increase in import costs and hike in petroleum prices etc.
“The higher value of dollar seems a windfall for exporters but it would not last long. Our competing countries are also devaluing their currencies and we must maintain our competitiveness,” the LCCI president said. “The Pakistani rupee has taken a historic fall against the dollar and plunged to a historic high of Rs137 in the open markets and Rs135 in the inter-bank market as the trading was underway. This has happened in aftermath of the government’s announcement to seek IMF’s support in stabilizing its foreign currency reserves and avoid a severe balance of payment crisis.”
Hyder said that the government, Ministry of Finance and SBP need to ascertain the factors weakening the value of rupee and check the possibilities of undue speculations and panic buying.
He said that an unchecked increase in the dollar rates is multiplying the cost of doing business and badly affecting the industrial, manufacturing and agriculture sectors as Pakistan has to import fertilizers, food items, oil, machinery and industrial raw material.
LCCI Senior Vice President Khawaja Shahzad Nasir and Vice President Fahimur Rehman Sehgal said that the government should take immediate measures to arrest further devaluation of rupee to avoid more damages to the economy. They said although the weaker rupee benefits the 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.
The LCCI office-bearers said that if the greenback continues its upward flight, it will certainly inflate import bill besides lowering the competitiveness of Pakistan’s business and industry.