KARACHI: Irfan Iqbal Sheikh, President FPCCI, has maintained that free-falling rupee has reached a point where it has become a threat to the national security as LCs for petroleum imports are being opened at a much higher rate than that of inter-bank rate; and a grave law & order situation might emerge in case of any fuel shortages for transportation and electricity generation.
He added that he is forewarning all the authorities that we are not far from a Sri Lanka-like scenario and radical decisions are needed to reverse the situation.
Aqeel Karim Dhedhi expressed his shock that despite the fact that many numbers are showing improvement over the last few weeks like international oil prices, declining edible oil prices and better supplies of many other commodities, the government has failed to rein in inflation.
He added that imports are expected to be considerably lower this month as compared to the last couple of months; but, still the rupee is in a free fall – which is only adding fuel to the uncertainty.
Irfan Iqbal Sheikh has emphasized that the SBP cannot continue with the free-floating exchange rate; and, it has to apply regulatory tools to minimize the speculation, uncertainty, hoarding, malpractices and misinformation.
He maintained that we do not even have enough foreign exchange reserves to cover for two months of imports.
Irfan Iqbal Sheikh has noted with profound concerns that the trade deficit for the fiscal year 2021 – 22 has clocked at a record $48.66 billion and that translates into more than $4 billion a month on an average; while it was $30.96 billion in the previous year, ie, 2020 – 21 and this shows a huge increase of 57 percent.
The FPCCI Chief proposed that the government should announce the expected inflows of dollar through all sources to put a halt to the uncertainty, chaos and rumor-mongering in the market, ie, the IMF, the World Bank, ADB, IDB and other multilateral & bilateral grants, loans and financing facilities.
Irfan Iqbal Sheikh admonished the fact that despite a bloodbath in the foreign exchange, the government has failed to appoint a governor for the SBP; and, that reflects poorly on government’s seriousness to address the situation.
The FPCCI President explained that just to keep their economies afloat, US, EU and India have kept their interest rates negative; while, on the other hand, Pakistan has raised the interest rate to 15 percent and financing is not available to businesses from commercial banks at less than 17 percent. No business can repay their loans with such high inflationary pressures and such high interest rates, he added.
Copyright Business Recorder, 2022
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