SBP urged to arrest dollar flight
Lahore: Hasty fall of rupee against USD will dent the economic cycle of the country besides scaring of the foreign investors. State Bank of Pakistan should immediately intervene into the matter and control this dilemma.
In a statement, President of the Lahore Chamber of Commerce & Industry Mian Tariq Misbah said that the devaluation will lead to lower industrial productivity, hike in cost of doing business, surge in debts, harm exports, inflation hike, reduce the purchasing power of the masses that will pose serious challenges for the economy.
He said that devaluation of Pak rupee has raised complexities for all economic sectors. He said that surge in dollar price will increase the import bill as all imported oil, raw material and other essentials will go high.
The LCCI President said that recent surge in the prices of the USD will not only jack-up the cost of doing business but will also erode the profit margins. He said that the State Bank of Pakistan needs to ascertain the factors weakening the value of rupee and check the possibilities of undue speculations and malpractices in the operation of foreign exchange markets in Pakistan. This will help stabilize rupee and restore the confidence of the business community.
Mian Tariq Misbah said that an unchecked increase in the dollar rate will multiply 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 materials.
LCCI Senior Vice President Muhammad Nasir Hameed Khan and Vice President Tahir Manzoor Chaudhry said that the government should take immediate measures to arrest further devaluation of rupee to avoid more damaging consequences for the economy. He said though 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 thus eroding the financial advantage of a weaker rupee.
The LCCI office-bearers said that the economy is already under pressure owing to multiple internal and external challenges it has been facing for the last many years and COVID-19. They said that further fall in value of rupee will cause more contraction in economic activities leading to a drastic cut in the tax revenue for the government.
The LCCI office-bearers said that if the USD continues its upward trend, it will certainly inflate import bill besides lowering the competitiveness of Pakistan’s business and industry. Therefore the government should get quickly into action to arrest this dangerous trend. They suggested to the government to immediately introduce institutional reforms and curtail non-development expenditures for the sake of country’s economy and its people.
