LAHORE: The Lahore Chamber of Commerce & Industry on Thursday has urged the State Bank of Pakistan to control the rapid surge in dollar price.
“Inter-bank US dollar rate is ringing alarming bells and calling for immediate attention of the State Bank of Pakistan to avoid economic crisis. Rupee devaluation would be the last straw on the back of camel”, LCCI president Mian Nauman Kabir said in a statement.
He said that the dollar is crushing Pak rupee that will reignite high inflation and halt growth by hitting all the important sectors of economy which are already feeling the heat of political unrest in the country.
“US dollar price against rupee was Rs 4.76 in 60s, Rs 59.30 in 2005 and reached the highest level during the current financial year. Soaring dollar price led to trade deficit, import costs, hike in POL prices etc”, Kabir said.
He said that the recent surge in the prices of the greenback would jack-up the input cost that would hit the export-oriented industries hard.
The LCCI president said 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 stabilise rupee and restore the confidence of the business community.
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.
Mian Nauman Kabir 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 neutralised by the costly imported inputs of manufacturing sector including textiles thus eroding the financial advantage of a weaker rupee.
He said that the economy was already under tremendous pressure owing to multiple internal and external challenges it has been facing for the last many years.
He said that the government observed a little restraint; the economic situation would have been quite encouraging. He said that today all sectors of economy are in trouble and a further fall in value of rupee will cause more contraction in economic activities leading to a drastic cut in the tax revenue for government.
Mian Nauman Kabir 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. Therefore, the government should get quickly into action to arrest this dangerous trend.
Copyright Business Recorder, 2022