ICCI calls for urgent remedial measures to stabilize exchange rate

ISLAMABAD ( Web News )

The Islamabad Chamber of Commerce & Industry (ICCI) has shown great concerns over the falling value of rupee against dollar as it would create multiple problems for business & economy and called upon the government to take urgent remedial measures for ending the volatility and bringing stability in the exchange rate.

Sardar Yasir Ilyas Khan, President, Islamabad Chamber of Commerce & Industry said that the value of Pakistani rupee has now tumbled to over Rs.168 against one dollar, which showed that our currency was losing its value at an alarming rate. It reflected a deteriorating market perception about the country’s capacity to finance its foreign debt obligations going forward. He said that the constant erosion in the value of rupee was severely disturbing all future plans of the business community as it needed a stable exchange rate for long-term business and investment planning.

He said that people were already facing great problems due to high inflation and falling value of rupee would bring a new wave of inflation in the country making life of common man more miserable. He said that Pakistan’s trade deficit has risen sharply in August driven by surging imports compared to exports as merchandise trade deficit has reportedly reached $4.05 billion in August against $1.740bn over the corresponding month of last year showing an increase of 133 percent. He stressed that the government should incentivise imports substitution to reduce dependence on imports that would arrest further devaluation of rupee and prevent the build-up of imported high inflation. He said that the traders were also reportedly booking dollars for future import payments at a higher premium or spread, which predicted further rupee depreciation. He said that in this scenario, the growth of the economy would remain uncertain amid fears of further deterioration in the fiscal and current account imbalances and it was high time that the government should take urgent remedial measures to curb the situation from getting worse.

Fatma Azim Senior Vice President and Abdul Rehman Khan Vice President ICCI said that some industries were importing around 70 percent of their raw material for manufacturing activities and decreasing value of rupee would further push up production cost making our exports more uncompetitive in the international market. They said that the government was charging high taxes on POL products and emphasized that it should make significant cuts in such taxes in these tough times to provide some relief to the inflation-hit people.