KARACHI: Factories are under the risk of closures or facing financial penalties for not being able to keep up with their production schedules and export deadlines due to unprecedented rupee depreciation.
Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Acting President Suleman Chawla said that the unprecedented volatility in the rupee-dollar parity is playing havoc with the economy and now imports of essential commodities and industrial raw materials are also under threat, if the current bout of downward spiral continues.
The FPCCI acting chief noted that the rupee has crossed Rs220 against the dollar in the interbank market on Tuesday, which shows a depreciation of another Rs6.79 against the dollar.
The business, industry and trade community had not yet recovered from Monday’s depreciation of 1.9 per cent, he said, adding that no country or economy can bear the brunt of exchange rate depreciation of around 7 per cent in a period of two days.
This should be treated as an economic emergency from all stakeholders, he said, while reiterating the FPCCI’s stance that all parties should agree on a lowest common denominator, i.e., charter of economy.
Chawla said that the FPCCI is ever-ready to play its due role in making all stakeholders sit together in the broader national interest.
The FPCCI acting president proposed that the government should announce the expected inflows of the dollar through all sources to put a halt to the uncertainty, chaos and rumor-mongering in the market.
Chawla emphasised that perception is mightier than the reality in the markets and the government needs to communicate and reach out to the markets to instill confidence and credence with regards to their financial management of the national accounts.
He also expressed his concerns pertaining to various restrictive measures being applied by the State Bank of Pakistan (SBP) to control the outflow of the dollar.
The FER needs to be protected but not at the cost of export-oriented industries, disrupting industrial production and discouraging LCs and cash against document import schemes, he added.
